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Monday, 12 September 2016

Downside Targets

Well the bears certainly found their car keys on Friday, and I was pleased to see (buffs fingernails modestly) that ES Dec closed exactly on the double top target at 2114.5 that I gave on Friday morning. So what now?

All charts today done for Trader Chart Service at theartofchart.net at the weekend.

Well obviously it seems very likely that this is the 4%+ retracement that I've been looking for and historically the absolute minimum target that I'd be looking for on SPX here would be a 3.9% retracement into 2108, with the current low at 2119. The obvious target for this move though remains rising support from the February low, currently in the 2090 area, and I'd be surprised if that wasn't tested. Short term resistance is the daily lower band, currently at 2143 but dropping of course, and broken support at 2148. SPX daily chart:
RUT looks similar but I have two obvious targets there, which are the possible H&S support and strong support level in the 1198/9 area, and rising wedge support in the 1165 area. RUT daily chart:
Short term support not as clear on NDX, but if you're wondering whether I think that it is likely that NDX will test that rising megaphone support , currently in the 4335 area, this year, then the answer is that I do. I think this is a topping process for that move and I'm still leaning towards a flat to red 2016 as I called on the first trading day of February on my January stats. You can see that post here. NDX daily chart:
I'm expecting a rally then lower on the indices. I'm mainly watching SPX and RUT here and I'm wondering about a possible match between RUT support at 1197/8 and SPX rising wedge support test in the 2090 area. That might deliver a lower high in the high window in a couple of weeks and shape the larger decline that would likely follow that.

Stan and I are launching our new Big Five chart service this week covering AAPL, AMZN, FB, NFLX and TSLA today with a free public seminar an hour after the close. If you'd like to watch that free webinar you can sign up for that here.

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