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Thursday 10 August 2017

Rejection With Fire And Fury Such As The World Has Never Seen

From what I've been hearing on the news I'm assuming that this week is International Overblown Hyperbole Week so I have given a nod to that in the title today.

Back here on earth the trend down day today has cleared out some support levels and SPX may well be starting a daily lower band ride, though obviously that will need some follow through tomorrow.

I'll skip the futures charts today and expand on the index charts as it now seems likely that this much delayed pullback is at last getting started. If you would like to see the futures charts that I was looking at this morning they are on the my premarket video for Daily Video Service subscribers at theartofchart.net. I posted that on my twitter before the open and if you missed that then you can see it here. Other instruments covered in the video as well as ES, NQ & TF (covered at the start of the video) are CL, NG, GC, HG, DX, ZB, KC, SB, ZW, CC, EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD & NZDUSD.

SPX has now slightly broken below rising wedge support from the May low and the minimum target is the 38.2% fib retracement of that move at 2425. The obvious target, as I marked on this chart on 29th July, is the 50% retracement target at 2405 and the possible H&S neckline there. The hourly RSI 14 sell signal made target today. SPX 60min chart:
On the daily chart the RSI 5 / NYMO sell signal made target at the close today and SPX closed below both the 50dma and the 3sd daily lower band, though with the bollinger bands this compressed a hit of the 3sd lower band was to be expected on any decent decline. SPX daily chart:
On RUT the first IHS I have been looking at broke down with a target at a full retrace of the move up from the May low at 1351. Main support on the way at rising channel support in the 1377 area was broken at the lows today. RUT 60min chart:
On the daily chart the RSI 14 sell signal made target at the close today. RUT has reached the main support trendline at rising channel support from the Feb 2016 low. I'm expecting that to break but it might hold. This is a major support level test. RUT daily chart:
The obvious next target on NDX is rising megaphone support from the Nov 2016 low. That is now in the 5730 area, slightly higher than the H&S target I have on NQ in the 5710 area. That is a significant support trendline, though not as important as the support being tested on RUT here. On a break below the obvious next obvious target would be the possible H&S neckline in the 5575 area. The hourly RSI 14 sell signal made target at the lows today. NDX 60min chart:
On the daily chart NDX closed on the 3sd daily lower band and below the 50dma. The weak RSI 5 sell signal made target at the close and the only remaining sell signal on any of the daily or hourly charts on these three indices is the daily RSI 14 sell signal on NDX. NDX daily chart:
My working assumption is that this is the start of a larger move. Likely see a rally from here and if this is a strong lower band ride the 2sd lower band may start out being main resistance. That closed the day on SPX at 2451.

Stan and I did our monthly free public Chart Chat at theartofchart.net on Sunday, and if you would like to see the recording that is posted on our August Free Webinars page. This week's edition of The Weekly Call is posted and the model portfolio there is up 188% in the nine months to August 5th, obviously well on course to make our target minimum 200% return over the first year. As and when that target is reached we're thinking of making the strategy there a bit less conservative. That's a free weekly service and if you trade futures I'd suggest adding it to your reading list.

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