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Monday, 1 June 2015

The Three Bears

I posted the chart below on Friday and support on this rising wedge held through to the end of the day. Whether it holds this morning may well decide the week. SPX 15min chart:
This is just the smallest of three bearish rising wedges here, The largest from the October low has already broken down and the smaller two rising wedges are part of the topping pattern for that wedge. A break below smallest rising wedge support opens up a test of medium sized rising wedge support in  the 2080 area. a break below the 2080 area would invite a test of double top support at 2039.

While bulls are holding smaller rising wedge support though, they still have a shot at clearing the 50 hour MA at 2120 and heading of to test the wedge resistance levels in the 2135-45 area, so we'll see how they do this morning. SPX 60min chart:
The double bottom on ZB may be a bear flag and a smaller rising wedge within the rising (flag) channel from the lows has just broken down. As long as rising channel support holds this may well be an IHS forming. On a break of channel support then the bear flag is confirmed and I'll be looking lower. In the meantime I'm expecting ZB to fall from here. ZB 60min chart:
DX has formed a rising channel from the retracement low and has been testing channel support. On a break below I'd be looking for a retracement into at least 95.5. There have been two significant unsustained breaks below channel support this morning so we may well see that retracement.  DX 60min chart:
On Friday morning we had a decent bull setup fighting very bearish historical stats, and the stats won. This morning we have a decent looking bear setup and fairly bullish historical stats, with Dow up 19 of the last 25 first trading days of June. The general first day of the month stats over the last year are less impressive, with seven of the last twelve closing red, with an average (mean) gain on the day of +2 over that year. I'm leaning short, but not with any great conviction until we see a sustained break below small rising wedge support in the 2106 area. I'll be leaning bullish if that support holds all morning, and strongly bullish (into 2135-45) on a sustained break over the 50 hour MA in the 2120 area. - UPDATE - As I've been writing the smaller rising wedge support has broken. The next obvious support is in the 2080 area though. A break over the 50 hour MA now, if seen, would suggest a retest of the high to form the second high of a small double top.

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