- 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
- 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.

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.

No comments:

Post a comment