- This blog has a copy of all header posts that I publish anywhere, so that those interested in seeing what my thoughts are on the markets can find them easily.
- I will be answering questions and responding to comments, so feel free to respond to any posts and I will see your comment even if it is not on the most recent post.
- If you're interested in seeing any intraday charts I post, I do that on twitter, and my twitter handle is @shjackcharts.
- The charts in the posts are as large as I can practically make them. if you would like to look at one more closely, click on it, and the link will take you to a larger version at screencast. If you click on that again, you will get a full page version, and can use the resizing function on your browser to enlarge parts of interest further.

Thursday, 31 December 2015

Santa Is Leaving the Building

At the start of the week I posted the very bearish looking sequence of RUT charts, suggesting strongly that downside was likely to dominate the next couple of weeks, and after all the bullish excitement on Monday afternoon and Tuesday, all that has changed on RUT is that there are now nested double tops in place to clarify how RUT is going to make it to those downside targets. With the support breaks yesterday and gap down this morning it seems that Santa is leaving the building or has already left, and that being the case I'm not expecting the highs this week to be challenged before at least the second half of January. Here is the RUT 15min chart from yesterday's close to show the setup here. RUT 15min chart:
I'm posting my ES, NQ and TF 60min bonus charts that I did for theartofchart.net subscribers this morning as my other charts today. This is part promotional but mainly because I was up late and still feeling a bit under the weather. I'm very happy that tomorrow is a holiday. ES Mar 60min chart:
NQ Mar 60min chart:
TF Mar 60min chart:
What's the takeaway here? The Santa rally is very likely over, and the setup here is strongly suggesting that the first week of January may well be a rerun of the very bearish first week of January 2015. I'm cautious about holding shorts over the weekend but until further notice I'm treating any decent bounces as sell opportunities.

The big number today is the closing print on SPX in 2014 at 2058.90. I understand that there has never yet been a year with a five in it that has closed red on SPX so there may be some pressure to try and maintain this again this year. I'm putting the odds of a close under that number today at 70/30 in favor of the bears on this opening setup.

Lastly a reminder that Stan and I are doing a free to all Chart Chat webinar on Sunday at theartofchart.net, and that if you enjoy top quality TA, or are at all interested in the 2016 price prospects for equities, bonds, forex, precious metals, commodities etc etc, then you should consider attending. You can sign up for that here. Spaces are limited so don't wait too long to register if you are planning to attend.

A very Happy New Year to everyone and my next regular post will be on Monday morning. :-)

Wednesday, 30 December 2015

Tis The Season

The bulls put in a very strong day yesterday and, so far at least, the post-Xmas Santa Rally is intact. Bulls have the advantage today unless the bears can really impress. That would need a break below 2065 SPX this morning for me really & that would be the 2055/6 area on ES.

Xmas isn't just a season of cheer and bullish tape however, it is also a season of colds. I have a mild cold, my trading bud Mike Vacchi at Princeton Trader has a worse one, and my collaborator Stan Nabozny at theartofchart.net has the worst, having lost his voice altogether overnight, so I did my first ever solo Chart Chat this morning.

As a result I'm running kind of late this morning and I'm going to use the ES, NQ and TF bonus charts that I posted for theartofchart.net subscribers this morning, as they tell the story & it will save me a lot of time. If you're interested in seeing these every morning then I'd mention that I also post the DX, CL and GC charts as well, and sometimes others, and these are currently availasble to all subscribers, though we are planning to restrict these to annual or triple play subscribers within a couple of months. ES Mar 60min chart:
NQ Mar 60min chart:
TF Mar 60min chart:
Bulls took the short term advantage back yesterday and unless we see a break down then we could see 2090 SPX on a push up today. Bulls are working for end of month/quarter/year window dressing here and so far they are delivering that. There is strong resistance just over 2090 SPX so I'm still skeptical as to whether they could break above there. We shall see.

Just a reminder that Stan (hopefully) and I will be doing a free to all Chart Chat on Sunday with a multi-timeframe look at equities, forex, bonds, energy, precious metals, some other commodities and if we get a question about it, possibly even a look at kitchen sink futures. All are welcome and if you are interested in the price prospects for pretty much anything in 2016, or just enjoy top quality TA then you can sign up for that here. Spaces will be limited so don't wait too long to sign up if you want a place. Get well soon Stan! :-)

Tuesday, 29 December 2015

Testing Santa's Resolve

Only one chart today and it is the main chart that I am watching on SPX. I did the chart on Saturday for Chart Package subscribers at theartofchart.net, and we are now close to the possible falling channel resistance test that I was looking at then. I have that in the 2078 area. If that resistance holds then we will most likely see a big decline start there, though the decline would most likely not get serious before the end of the year. SPX daily chart:
If we see SPX break over 2080 and hold it, then the upside opens up and we could see a test of 2100, but I'd be surprised to see that here. I've been surprised before though and seasonality is strongly bullish into tomorrow's close.

Just a reminder that Stan and I are doing a free to all Chart Chat on Sunday at theartofchart.net. If you are at all interested in where prices are likely to be going on all main indices, bonds, forex or commodities then I'd consider attending. You can sign up for that here. If you aren't interested in any of those things then I'm not sure why you are reading this post, though if you are just here for the fine charting and subtle humor then there should be both of those available on Sunday too. :-)

Monday, 28 December 2015

Resistible Force vs Movable Object

I hope everyone had a great holiday. I did and am returning to work today relaxed and well rested, though there is still a bit of post-holiday tidying to do in my house before guests arrive tomorrow.
What are the markets looking like today? Well the charts are all looking pretty bearish, with SPX, NDX and RUT all in likely topping patterns from the three day Santa rally that eventually arrived last week. This is at odds with seasonality here, as the three days after Xmas after supposed to lean as bullish as the three days before. We'll see what happens here but the short term charts all lean bearish, and below I'm showing the RUT charts that I did for theartofchart.net Basic Chart Package subscribers yesterday as going from the 15min chart through 60min, daily and weekly charts is painting a tremendously bearish picture here for RUT over coming weeks. Is RUT really topping out here for a 10% new leg down? I'm thinking 70% yes. We'll see what develops from here.

Rising wedge / bear flag topping out on the RUT 15min chart:
Obvious next move is at least a retest of 1108 low on the RUT 60min chart:
The full flag target in the 1030 area is a match with possible falling channel support, currently in the 1030 area. A fail here would be a fail at strong resistance at the middle band on the RUT daily chart:
A fail here is also a fail at strong resistance at the middle band on the RUT weekly chart:
In the short term, going into the year end, there is a huge stat to be aware of here, and that is that I have read that the last year that the SPX closed red in a year ending with a 5 was in 1875. This stat is all the more impressive for the fact that S&P only first launched a stock index 48 years later in 1923, though it's possible of course that the stat was referring to the Dow Industrials index which was launched earlier. Bottom line though is that the year before a presidential election year has been consistently green for a very long time, and it pays to be cautious fighting history like that. Having said that 2015 has been a year for running over big stats. I'm thinking better than 50/50 on this setup that this stat doesn't survive this year. Unless we are to see a significant break up on SPX I'm not looking any higher than 2080 at the outside this week.

A couple of announcements to make here. Stan and I are doing another free to all Chart Chat at theartofchart,net on Sunday. and the signup link for that is on this page here. False modesty apart, Stan and I have been killing it lately so if you are at all interested in the prospects for prices on equities, bonds, forex or commodities, or in seeing top quality TA at work for free then you should come. Places are limited so sign up ASAP to ensure that you have a place.

The second announcement is that Stan and I are doing a special extra 20% discount for anyone buying an annual subscription to any of our services. This means that anyone buying an annual subscription now will effectively be getting four months of the year free, against our usual monthly rate, and our policy of maintaining lifetime rates means that as long as the membership is continuous, that membership rate will never increase in the future for anyone taking the offer now. Within a couple of months Stan and I are planning to move both my bonus futures charts in the mornings, and the private twitter feed, to be for triple play or annual subscribers only, so if you are already a monthly subscriber and want to continue having access to these (currently in beta) services then this would be a very good time to upgrade to annual. You can get the discount code for that offer here.

Friday, 18 December 2015

No Sign of Santa

All bulls had to do yesterday was hold on to most of their gains from the previous day, but they couldn't do it. By the end of the day all they had managed to hold onto the 5dma, so there is at least no 5dma Three Day Rule target back at a retest of 1993. Unless bulls can reverse yesterday's reversal candle today though, the fail yesterday confirms the downtrend, and there is still no sign of that Santa Rally. 

Props to my charting partner Stan at theartofchart.net, who called in his Wednesday night video for a mid-2070s high and then the start of a new leg down that might go as low as 1940. That leg down may well obviously be in progress now. If you are interested in seeing these nightly videos then I'll mention that there is a discount promotion through Christmas on all annual memberships, and if you're interested you can see that here
SPX daily chart:
If bulls are going to have a decent chance of reversing back up here, then their first priority is to recover back over the 50 hour middle band, currently at 2043. I'm thinking we may well see a test of that today and whether the bulls can convert that back to support most likely determines the next move. Unless we see a break back up I now have a falling channel, established at the high yesterday, and the next obvious target is at channel support in the 1970-80 area. SPX 60min chart:
This is odd action for December, which tends to be bullish on low volume. As we go into next week we should start to see less interesting tape as volume dries up hard into the holiday. That would normally result in dull bullish leaning tape, but perhaps it might be dull and bearish this year.

I wrote a post on the first trading day of February talking about the stats I had worked up on the bearish action in January this year. You can see that post here. I was saying then that historically the best performing comparable years had been up 1% and 3%, so the best likely outcome for SPX in 2015 was flat to slightly up. The closing print for 2014 was 2058.90 and the best case 3% up would see SPX closing the year in the 2120 area. That is starting to look overambitious now. We'll see how it goes.

I'm taking the whole of next week off so my next post will be on Monday 28th December. Everyone have a great holiday :-)

Thursday, 17 December 2015

Doing Well by Doing Nothing

Bulls inflicted a lot of technical damage yesterday, with conviction breaks over the 50dma, 200dma and daily middle band. All bulls have to do to consolidate yesterday's gains is to hold at or above the daily middle band today. That closed yesterday at 2070. Bears regain the advantage IMO with a close below both of the 200dma at 2062 and the 50dma at 2060. Today is the third day on the 5dma Three Day Rule, so a close below the 5dma today would trigger a very likely retest of the 1993 low. the 5dma closed at 2040 yesterday but will likely close a bit higher today.

So far SPX is following the falling megaphone option that I was looking at in my morning post on Tuesday 8th December, and have been following since. You can see that post here. We have seen the  triangle thrust down to megaphone support, the low at 1993 just under my 1995-2000 target zone, and then the full triangle thrust retracement back to 2067 and bulls have broken back over strong resistance in the 50dma to daily mid band zone. If bears can't deliver a strong reversal candle back through support today, then the next move is a test of megaphone resistance, which is in the 2095-7 area today. As this megaphone is a bull flag on the bigger picture, a break up from it should then deliver a retest of the all time high at 2134, and I'd be looking for likely failure there or a little higher. SPX daily chart:
There is negative divergence here, as there also was yesterday morning. There is an open RSI 5 sell signal on the hourly chart. SPX 60min chart:
NDX was testing declining resistance from the high in the last hour yesterday. a break above that would be bullish and open up a retest of the highs. A hard failure there would look ominous for bulls. NDX 60min chart:
I don't have a directional lean today. Bulls have to hold above the SPX daily middle band on the close today, and we'll see if they can do that.

Just a reminder that Stan and I are doing a free to all webinar at theartofchart.net after the close with our forecasts for 2016, and a review of how we did on our forecasts a year ago. There are still some places available, but if you want to attend you should sign up ASAP to ensure that you have a place. You can do that here.

I'm planning to take the whole of next week off as I could use a break. My plan would be to resume posts on Monday 28th December.

Wednesday, 16 December 2015

Looking up at the Knees of Giants

Today is the day when we find out whether the Fed will be raising interest rates by 0.25%. In a normal year this might lose a contest for front page space in that event that Angelina Jolie's dog was lost on the same day, but with the last rate rise a long long long time ago, even this tiny move has assumed a great significance.

Back in the days when The Fed didn't spend all their time frantically trying to repair the appalling damage caused by previous Fed Chairmen, William McChesney Martin, Fed Chairman from 1951-70 said (paraphrasing) that it was the role of a central bank to 'take away the punchbowl just as the party was really getting going'. After Volcker in the 1980s though, a persistent deflation took hold in the quality of Fed Chairmen that is perhaps expressed best on the chart below:
These days the role of the Fed seems to be to keep the alcohol content of the punch over 10% to keep the party breathing at all, and today is where we find out whether that target alcohol content will be reduced to 8%. We'll see.

Regardless of whether the significance of this Fed move is wildly overblown though, the impact on the equity markets could still be big for psychological reasons, and the ambiguous setups on USD and bonds are telling us that we could see a serious break either way depending on both any announcement, and how that announcement is received. I'll be flat going into the Fed & would suggest that you consider doing the same.

Where are we on SPX then? Well SPX broke over the 5dma yesterday, so SPX is back on the 5dma Three Day Rule, and SPX needs to close at or above the 5dma today and tomorrow to avoid a very likely retest of the 1993 low. The 5dma is currently at 2035,

Shorter term the 50 hour MA is decent support at at 2047, and the gap fill is at 2043. If the gap fills this morning we may well see a hard flush down from there. There is a lot of resistance overhead into the daily middle band at 2069 and I've listed those on the chart below. SPX daily chart:
This is a decent morning to take off, and the tape after the Fed announcement is best played by those who are very experienced in playing this kind of tape. My lean here is towards a retracement of the move up so far from 1993, but obviously the Fed announcement may run over any setups today. The next few days will be easier to call at the end of today, when we can see what has broken.

Tuesday, 15 December 2015

Resistance Options

Everything going slow today as I'm really not feeling 100%.

SPX went slightly below my 1997/8 target and established a slightly lower falling megaphone support trendline at 1993. On my main scenario that has been playing out very nicely so far, the next target within the megaphone in megaphone resistance in the 2096-9 area. We'll see. The important resistance levels today are marked on the chart below. SPX daily chart:
RUT broke down slightly from the falling channel into a falling megaphone. The next obvious target within the megaphone is megaphone resistance in the 1135-7 area. RUT 15min chart:
NDX broke the falling channel and slightly broke the big double top support, and then reversed hard. NDX is well over the 61.8% fib retracement and getting close to filling the big breakaway gap into 4643.05. That would be impressively bullish. NDX 15min chart:
All three indices have strong 15min RSI 14 buy signals and both SPX and NDX have made target on those, with RUT slightly short. My preferred scenario has today most likely being a trend day and the next target at the full triangle retrace at 2067 on the way back to megaphone resistance just under 2100. Today is a cycle trend day so we'll see how that goes. If we are going to see a fail into another leg down, then my eye will be on the SPX 50 hour MA at 2051 (tested at the time of writing), the 50dma at 2059, the 200dma at 2062 and the daily mid band at 2069.

Just a reminder that Stan and I are doing a special free to all Chart Chat at theartofchart.net on Thursday after the close with our projections for next year and reviewing our calls from the one we did a year ago to see how we did. You can sign up for that here and spaces are limited so if you are coming, you should sign up sooner rather than later.

Monday, 14 December 2015

Globex Rollercoaster

SPX made it most of the way to my target area but I'm not certain it's going to make it the rest of the way. 60min buy signals are already brewing on ES, NQ and TF. I'm ideally looking for a lower RTH low on SPX, NDX and RUT, but it's possible that the lower lows already made in globex will be enough. SPX 60min chart:
NDX has already tested the obvious support trendline. Significantly lower in RTH would break that. NDX 60min chart:
RUT too has tested the obvious (falling channel) support trendline. That's decent looking support and a decent break below might follow through to the downside. RUT 60min chart:
Globex was an adrenaline-fuelled rollercoaster but has ended up pretty much back at Friday's close. I'm leaning towards slightly lower lows in trading hours and if so we would most likely make an AM high that fails into that. After that I'm favoring a decent rally.

I'm assuming that we won't see any big declines this month due to seasonality. I could be mistaken about that and did a post yesterday looking at the very bearish looking bigger picture setup. you can see that here.

Stan and I are doing a free to all special webinar on Thursday after the close at theartofchart.net with our take on what's likely to happen in 2016 across equity indices, forex, commodities, precious metals etc. We'll also be reviewing how we did on our forecasts last December. You can register for that here. Spaces are limited so if you want to attend I'd sign up sooner rather than later.

Sunday, 13 December 2015

Farming On The Slopes of Vesuvius

I've mentioned a few times over the past few months that the equity indices are likely in a topping process, and a few days ago that the setups on NDX and RUT had reached a stage that I would expect to see at a major top. The same is true of SPX. Do I think these patterns will play out? Most likely yes.

I'm not expecting them to play out right now, but that's mainly because big declines are a rarity in December. These tops have formed, but I'm expecting the markets to limp along through December until the winds turn more bearish in the January to March timeframe,

I may be mistaken however, and if I am then these topping patterns may have already started what will likely be a strong retracement of the huge move up from the March 2009 low. That decline could be triggered, as hard as a I find it to believe it, by the Fed increasing interest rates from almost nothing to slightly more than almost nothing next week.

If that is the case then I'd still expect this thrust down from the triangle to end soon, and we should still see that full triangle thrust retracement back up to 2067, but that could be it. If the Fed shrinks back from acting now, or the market shrugs off what is in truth, not much of a change, then there might just be one more all time high left in SPX before the retracement takes hold. SPX monthly chart:
NDX monthly chart:
RUT monthly chart:
Either way it's important to put this market top in context. It might feel like the end of the world for SPX to retrace back to retest broken resistance in the 1575 to 1600 area, but on the bigger picture this would be just a backtest of broken resistance on the SPX secular bear market pattern from 2000-13 that I posted in June 2013. You can see that post here. That pattern has a target in the 2440 area and after this retracement ends I'd be looking for that target to be hit in the next cyclical bull market, probably starting sometime in 2016.

Stan and I are doing a free to all webinar at theartofchart.net with our forecasts for 2016 on equity indices, currencies, precious metals, energy etc on Thursday next week and if you want to attend that you can sign up for that here. Spaces are limited so if you want to attend then you should sign up sooner rather than later.

Friday, 11 December 2015

SPX And ES Both Roll Over

I was saying that the odds favored down yesterday morning, and that was a very impressive gap down this morning. So how far is this move likely to go? Well we are looking at a thrust down from a triangle that broke down on Wednesday afternoon, retested broken triangle support yesterday afternoon and is playing out towards target this morning. I have the triangle target in the 1995-2005 area, though triangles aren't as good at making target as most patterns, and there have been a couple of early turns on triangle thrusts recently. I do have a trendline target in the 1995-2000 area though, and that favors this triangle making that target.

After the triangle thrust completes there should then be a full retracement back into yesterday's high at 2067, and if we see a bounce at my trendline support target then that should continue up into at least a retest of the 2100 area. I'll be watching for that turn back up. SPX 60min chart:
Here is the similar setup on ES with the same target area. ES 60min chart:
I'm watching TF carefully today as there is a decently formed falling wedge there with wedge support current in the 1128 area. That might do a bullish underthrow but TF looks unlikely to break below 1118 at the lowest today. I'll be watching this pattern as it may well signal when the triangle thrust is likely complete. TF 60min chart:
Longer term, if SPX reaches my support trendline and reverses back up there, then we are looking at a falling megaphone on SPX that is a bull flag on the bigger picture. If we see that reversal then SPX may well then make a run back up to retest the all time high at 2134. That would be a nice place to be looking for short entries into the next few months, as Q1 2016 looks unlikely to be a fun quarter for bulls.

Stan and I are doing a free to all year end webinar next week with forecasts for next year and some for 2017. We'll also be reviewing how we did on the one we did last December. If you're interested you can sign up for that here. We've done three free webinars so far in December. Recordings have been posted for these and you can find those here.

Thursday, 10 December 2015

So Now What?

After a wild opening spike SPX returned and broke my main triangle option and last Thursday's low, which was the full 5dma Three Day Rule target. I think that makes about three dozen of these 5dma breaks that have all made target since the start of 2007, with the only exceptions being two slightly higher lows when triangles were forming earlier this year. There will come a time when this stat doesn't deliver of course, as no stat can ever be perfect, but this was not that time. SPX daily 5dma chart:
So now what? Well the low yesterday took out my preferred triangle option on SPX but has left an alternate still in play. That could still hold and if so would require a reversal back up past 2065-70 area resistance towards the next target at triangle resistance in the 2100 area. I think however that the odds are now favoring a break down towards a retest of 2000 at falling megaphone support. This would be a likely bull flag on the bigger picture of course. SPX 60min chart:
The setup looks strikingly similar on NDX, with the triangle and bull flag options, albeit a flag falling channel in this case. NDX 60min chart:
The one I'll be watching very closely today though is RUT, with a decent looking falling wedge from the high on there. There is a strong wedge resistance trendline there, currently in the 1158 area, and it that should break up that would be an impressively bullish break that might well signal that the equity indices are going with the lower probability triangle option. RUT 60min chart:
Some of you will have been at the open to all Chart Chat at theartofchart,net on Sunday or have watched the recording since. We were looking at ES/SPX, NQ/NDX, TF/RUT, USD, oil, natural gas, gold, silver, GDX, and sugar and a couple of other trading instruments. If you watch the recording again today I think you will be struck with how well we predicted this week so far. You can see that recording here.

We've been trying to fit in a free webinar every Thursday on a variety of TA subjects and are doing two free to all webinars tonight. The first, led by Stan, is 'Elliot Wave and Retracement Patterns' at 4pm EST and you can signup for that here. The second, led by me, is 'Trending Patterns and how to trade them' at 5pm EST and you can sign up for that here. We'll be discussing the action today and what we are looking for next in these webinars as well so they should be well worth attending.

Our last free to all webinar for 2015 will be next Thursday, 17th Dec, at 4pm EST, and that will be 'Holiday Special Chart Chat - the Long Term View for 2016', and you can sign up for that here.

Today is the other cycle trend day this week. That means that either buyers or sellers are likely to dominate the day. It does not require a full trend day.

Wednesday, 9 December 2015

All Triangles This Year

The target on the 5dma rule is a full retest of the last low at 2042, and most likely a lower low. There is an exception though in rare cases where a triangle is forming, and we may well have that happening here. A daily close back over the 5dma, now in the 2071 area, should confirm the low. SPX daily 5dma chart:
Looking at the 60min chart I think there may be two triangles in play here, which is very unusual, though this has been a banner year for triangles. I have the triangle resistance levels in the 2087 and 2101 areas respectively. SPX 60min chart:
A late post today and SPX has been very busy in the first hour. Today is a cycle trend day so there are 70% odds that either buyers or sellers will dominate the day. That does not require a full trend day. I'm hoping that most of you caught my tweets before the open calling the cycle trend day and possible early low without making the full 5dma Three Day Rule target.

Tuesday, 8 December 2015

Retest of 2042 SPX Coming

Well I was saying yesterday morning that SPX was back on my 5dma three Day Rule, and that rule is that after a daily closing break over the 5dma that follows a 2%+ decline, SPX must close the next two days over it as well, or the low before the break up will be retested before the high before the decline.

With the clear break back below the 5dma yesterday I was saying  on twitter yesterday that the very likely next move was to retest the 2042 low, and with ES currently down hard from yesterday's close, I'm thinking that retest may well be today. SPX daily 5dma chart:
This isn't good news for my preferred scenario here that a bullish triangle is forming on SPX. That scenario really required a test of the 2100 area and slightly lower high before the next move down, and that's looking unlikely now. The other two options are a double top, which is my least favorite option here mainly because this is December, and a bull flag option, which would be a falling megaphone from the 2116 high. On a sustained break below the 2042 low I'd be wondering about a retest of megaphone support in the 2000 area. If seen I'd be looking for a likely reversal back up there. SPX 60min chart:
I'm not expecting a really serious decline here yet, but I was disturbed to see that RUT broke down from the rising wedge yesterday. That opens up a possible pathway back to the 2015 lows on RUT. The next big support level is possible double top support in the 1140 area. RUT daily chart:
If we are going to retest the 2042 low today then I'll be looking for an AM high that fails, very possibly at a test of strong resistance in the 2066 area. We may see a trend down day today if we see that failed morning high.

Monday, 7 December 2015

Back on the Three Day Rule

Three trend days in a row last week. It's been a while since we saw that. The turbulence may well continue. We were looking at it in Chart chat last night and that is posted for all on the front page at theartofchart.net. Bottom line is that we are expecting a little higher this week, possibly a bit over 2104, and possibly bit under 2104 if a triangle is forming. After that we should see another move down.

SPX broke back over the 5dma on Friday so SPX is back on the 5dma Three Day Rule. A close below the 5dma either today or tomorrow make a retest of the 2042 low this week very likely, though it might be a slightly higher low is SPX is forming a triangle. We may well be forming a triangle here and I've drawn that, and the RSI mirror pattern, on the chart below. SPX daily chart:
RUT is a decent fit with this scenario. There is unfinished business at least into a retest of last week's low, and the move from the low is looking like a bear flag. RUT 15min chart:
NDX is approaching a retest of major resistance in the 4739 high area. NDX 15min chart:
I really like the triangle option here on SPX though Stan is not so keen on it. If we see a hard fail just under the 2104 retest then that will boost the triangle scenario. I am assuming that we don't see a fourth straight trend day today as they are just so rare. Never say never though. :-)

Friday, 4 December 2015

Nice Moves

I've had a heavy, though very profitable, week and I'm flagging and working slowly this morning. The setup on SPX here is also simple enough to sum up in a couple of lines so today I'm going to use today's futures charts that I post every day for subscribers at theartofchart.net with notes.

ES has broken back over the daily middle band. Retracement may well be over. ES 60min chart:
NQ 60min chart:
TF has important unfinished business below at a trendline test currently in the 1160 area. I'm expecting that to be tested in the next few days regardless of any rally today. TF 60min chart:
My DX short is one reason that I am having a great week. My main target is a test of rising megaphone support, currently in the 95 area. Big inflection point there which most likely resolves up. DX 60min chart:
CL at an inflection point here at 39s test. Upside target 45.5 area. A break below 39 opens 37.5 and 35 as targets. CL 60min chart:
My GC long another big performer, albeit a slow starter. This move likely just a rally as long as DX holds the 95 support trendline. GC 60min chart:
If you want to see the current TLT setup I posted that on twitter yesterday so look there (@shjackcharts).

The SPX setup is that there are two key resistance levels today. The first level is the daily middle band in the 2075.5 area and the 5dma at 2077, effectively as single daily closing resistance level. That's currently breaking up but that break needs to hold into the close today. the second level is the 50 hour MA, currently at 2085. If bulls can convert that to support then we may well be on the way back to that 2116 retest that didn't quite make target on Wednesday.

Today is a cycle trend day. This means that there are 70% odds that buyers or sellers will dominate the day. If that delivers today then it is very likely that bulls dominate the day at this stage. My working assumption here is trend up day.

As I've been saying most days, the bigger picture setup looks very bearish but December seasonality is so strong for bulls that I'm thinking SPX will likely limp through until end end of the month. We may see repeated big swings and may well manage a new all time high in that time. Unless we see a conviction break of 2000 SPX I'm giving bulls the benefit of the doubt, at least to hold the 2000-2100 area.

This is proving to be an unusually interesting December across various markets. Stan and I are doing a free to all Chart chat at the theartofchart.net on Sunday afternoon at 4pm EST and we will be reviewing all of these markets and more there. You can sign up for that here. Unless you have quality TA or are entirely indifferent to being on the right side of a trend then you should find it well worth the time. Places are limited so if you want to attend I'd advise signing up today.