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Thursday, 28 May 2015

Nowhere To Run To

The bulls put in a very strong day yesterday and that has most likely put SPX on the 25% highs retest path, though the market has been so whippy lately that I'd like to see that SPX holds 2110-8 this morning to be sure. On the stats I gave last Friday one of these made a marginal new high that was the second high of a double top, and the other continued the previous uptrend. .

In truth these are almost a single option here, if only because resistance on the rising channel from the 2012 lows is now in the 2190-220 range, so unless that resistance could be broken, which historically is most unlikely, then headroom here is too limited to continue an uptrend for long.

If we are looking at the highs retest option then the obvious resistance levels are at the current all time high at 2134.72, the daily upper band at 2141 and the weekly upper band at 2153. The RUT chart is favoring the lower targets and the higher target would be a near perfect retest of broken support on the rising wedge from the October low so that has some appeal too.

If we see the continuation option that we would most likely punch through the weekly upper band (weekly close basis). if so I'll roll out the stats on these punches as indicators for an imminent top.

The 15min and 5min buy signals that I mentioned yesterday morning have both made target and a 5min sell signal fixed at the close yesterday, so I'm favoring an AM low today. SPX weekly chart:
SPX daily chart:
As long as bulls can hold support this morning then we should see the highs retested. If SPX breaks back below 2110 then yesterday was most likely a bull trap before a resumption of the downtrend. Neither option significantly changes my forecast for what we are likely to see over the rest of 2015.

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