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Thursday, 7 September 2017

If, Then

A couple of years ago a long-term reader described me as an 'if, then' analyst, and that was a decent description. The short term setup here is very much an 'if, then' setup. If short term support holds, then the rally should resume into the flag target at the retest of the all time high.

So where is that support? On the hourly chart that is at the 50 hour MA, currently at 2461 and with the 200 hour MA just below. That's been tested in the last day or so with more enthusiasm than I would prefer, but that's holding so far. SPX 60min chart:
In the short term there is a possible H&S formed or forming that could take SPX through short term support into another test of the daily middle band, currently at 2451. That's the alternate scenario if SPX tests short term support until it breaks. A break over yesterday's intraday high at 2469 would kill the setup. SPX 5min chart:
If short term support holds the setup on RUT here would be ideal for starting the next leg up. The low on RUT this morning was at rising support from the 21st Aug low and that has confirmed the trendline and established a possible rising megaphone from that low. If RUT is to retest the all time high, and there's no open target there but it would be an obvious next move, then that could be retested within the next move up within this megaphone. A break below rising megaphone support, currently in the 1395 area, would kill this setup, but until then this is a decent bull setup, and a possible 60min RSI 5 buy signal is brewing. RUT 60min chart:
The ES, NQ and TF futures charts below were done an hour before the RTH 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.

On ES key short term support is at the weekly and monthly pivots, both at 2458.25. These were tested at the lows yesterday but not so far today. ES Sep 60min chart:
On NQ key short term support is at the weekly pivot there, again tested yesterday and not so far today. Both ES and TF are arguably breaking up from bull flags from the highs. NQ Sep 60min chart: 
TF has retested Tuesday's low and a decent double bottom setup has formed that on a break over 1408 would look for a retest of last week's high at 1420. TF Sep 60min chart:
I like the long setup here and if the dip buyers can get moving this may well be the start of the move into all time high retests across all of SPX/ES, NDX/NQ and RUT/TF. A break of short term support looks for another retest of the daily middle band on SPX and perhaps lower.

Stan and I did our monthly free public Chart Chat webinar at theartofchart.net on Sunday, and if you would like to see the recording then you can see that on our September Free Webinars page. This week's edition of The Weekly Call is posted and the model portfolio there is up 205% in the ten months to August 31st, now slightly over our target minimum 200% return over the first year. As that target has been 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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