- WE'RE JUST RANDOM SPECKS OF DUST IN A TORNADO TO THE MARKETS .......
- CHARTISTS MUST PUT ALL BIAS ASIDE AND LET THE CHARTS DO THE TALKING OR WE'LL SEE ONLY WHAT WE WANT TO SEE
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Tuesday, 6 October 2015

Expecting Retracement Soon

Well that certainly wasn't a rejection candle yesterday, with the daily candle closing some 30 handles above the close on Friday, and with the close clearly above now broken falling channel resistance. However there is increasing negative divergence and I'm expecting some retracement soon. The first obvious target would be a retest of the daily middle band, now at 1948. SPX daily chart:
There is no 60min signal yet, but both RSI 14 and RSI 5 are very overbought. A 5min sell signal fixed yesterday afternoon, and any significant weakness this morning should fix the 15min sell signal that is also brewing here. It's too early to have a definite pattern for this rally but the main target on any retracement may be rising support from the 1871 low, currently at 1916 and rising at about 13 handles per day. Ideally I'd be looking for that to be tested in the 1940 area late tomorrow or early on Thursday. A break of that rising support would most likely mean that this rally high had been made, though until then I'd be looking higher. SPX 60min chart:
SPX might make a marginal new high before the retracement I'm expecting, but I wouldn't expect that to be much higher than yesterday's intraday high. This is very tricky tape though, so caution required.

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