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Friday 12 May 2017

Possible Triangle Forming

I posted the premarket video that I do every morning for Daily Video Service subscribers at theartofchart.net, on my twitter before the open this morning, and if you'd like to see that the link is here. The futures covered were (in sequence) ES, NQ, TF, DX, CL, NG, GC, ZB, HG, KC, SB, CC & ZW, The forex pairs covered were EURUSD, GBPUSD, USDJPY, AUDUSD, NZDUSD and USDCAD. Particularly pleased with my NG, CC and EURUSD calls today. We're looking for a major low on CC here and were very encouraged by a very bearish recent article on Cocoa in Barrons, though they are obviously best as a better contrary indicator if the instrument makes the front cover, and their best area of inverse expertise historically is precious metals. Hopefully Gartman will start shorting CC hard to fix the low.

The ideal setup for bulls here would be a retest of yesterday's lows to make the second low of a double bottom on ES and TF that would then look for a retest of the ATH on both. We haven't seen that yet and there may be a triangle forming here that will make that a slow process if seen at all. Another option is that the right shoulder is forming on an H&S, in which case SPX will likely kick around the rest of the day and maybe Monday too before breaking down. On this kind of setup the break down, as and when it comes, likely comes with a hard break down through gap support in a breakaway gap that doesn't fill. SPX 60min chart:
The 1min chart has been all lower highs and higher lows today and that's saying triangle. The best shot for this not being a triangle was the falling channel shown in purple dashes, and that broke up shortly after I capped this chart. If this is a triangle forming then it probably breaks down into a retest of yesterday's low .... eventually, but the triangle would be too large to be a bear pennant. SPX 1min chart:
The ES and NQ futures charts below were done before the open for Daily Video Service subscribers at theartofchart.net. If you are interested in trying our services a 30 day free trial is available here.

Key resistance on ES is still at the weekly pivot at 2391.25, falling resistance at 2394, and Wednesday's high at 2397. A break above these opens the all time high retest. A conviction break below yesterday's low at 2379 opens the downside. ES Jun 60min chart:
NQ has almost retested the ATH at the high today and that may need a full retest. That NQ is already doing the ATH retest strengthens the case that the swing high may already have been made on ES and TF.  NQ Jun 60min chart:
TF has come close to the retest of yesterday's low and on a full low retest a possible 60min buy signal would start brewing. TF Jun 60min chart:
I'd like to see a retest of the all time high on SPX to set up possible sell signals on the daily chart. That's looking less likely by the hour. Be aware that if we see a close near the lows today that that increases the chance that we see that hard break down through support on Monday morning. One way or the other that's likely to happen soon IMO, and if FBI tweets reach critical mass over the weekend then it could be Monday :-). Everyone have a great weekend.

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