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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.

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