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Friday, 17 February 2017

A Pearl Cast Before A Swine

I've blocked my latest twitter troll, though apart from the one with very poor english a few weeks ago, I strongly suspect that I've had the same troll on twitter and my blog for a few months now. If I'm right then he has a London IP address and seems to have a lot of time on his hands. Some of you may have been wondering about the posted trade I mentioned to him, as it's rare for me to post these, but I was a bit irritated at the 2015 high with being called a permabear for calling a high there, and with clueless pundits telling me that big retracements wouldn't be allowed by the Fed, so on Tuesday 26th May 2015 I wrote a post helpfully entitled 'On The Road to 1820', with SPX at 2126 at the time, and mentioned that I was short from 2132 ES and was planning to hold it for a 300 handle decline. I cashed that short at 1812 on the morning of Wednesday 20th January 2016 and reviewed it at the end of my post that day called 'The Trend Is Strong In This One'. It was a sweet trade and I considered that my point had been made. Needless to say my troll wasn't impressed, but then it's not possible to impress a troll. On to the markets.

On SPX I still like a retest of the high or marginal new high to make the second high of a small double top to end this move. If we are going to see that we should see that today. A break below yesterday's low at 2338.87 means that retest becomes considerably less likely. If we see a marginal new high today I'd be looking for a likely failure under 2355/6 SPX. SPX 60min chart:
On the daily chart yesterday was the first (albeit only slightly) red candle in a while with NYMO turned more firmly down. If we see a high retest today that would not set up any usable negative divergence on RSI, though it would most likely deliver hourly sell signals of course. SPX daily chart:
On ES we are seeing the rally that I was looking for this morning and I have a small double bottom target in the 2346 area that ES should deliver if it can sustain trade over important resistance at 2343. The falling wedge on RSI is currently testing wedge resistance. ES Mar 60min (pre-market) chart:
On NQ the falling wedge on RSI has already broken up and NQ has come close to an ATH retest this morning. I mentioned yesterday that I was looking for full ATH retests on AMZN and TSLA to seal the high. I'm doubtful about seeing that on TSLA now as TSLA has broken rising megaphone support for this move, but AMZN has just made that new ATH, and I'm looking for a hard fail from a marginal new high there. NQ Mar 60min (pre-market) chart:
TF has also broken the RSI falling wedge and has rallied somewhat, though if a small H&S is forming there then this rally may have a firm cap in the 1400 retest area. TF Mar 60min (pre-market) chart:
If we are going to see the ATH retest on SPX that should be today. Price is still thinking about it and the rest of the day could go either way from here, depending on whether 2343 ES can be converted back to support. We'll see. The RTH markets are closed on Monday so my next post will be on Tuesday morning. Everyone have a great holiday weekend :-)

PS. Stan and I are doing two free webinars next week at theartofchart.net an hour after the closes on Wednesday and Thursday. The first is the Big Five webinar on Wednesday (rescheduled from yesterday) looking at AAPL, AMZN, FB, NFLX & TSLA. We've been doing some really nice work on these the last few months and these are all likely topping out here short term for a strong retracement, so that should be interesting. The second on Thursday is a second webinar on 'Technical Patterns You Can Profit From' following on from the first one in January. As always the TA will be world-class and the subject matter will be interesting so if you'd like to see either of those you can register for one or both on this page here.

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