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Tuesday 3 October 2017

On A Working Holiday This Week

I'm on a working holiday this week and am working on a friend's computer setup. I am just about scraping by with a lousy two 19" screens, which beats the hell out of a laptop but still feels very restricted compared to my usual setup. I'm doing a post today and either on Thursday or Friday, and then will be back behind my usual desk on Monday. :-)

SPX has hit and slightly broken above the wedge resistance I have been looking for. This is likely a bearish overthrow but as NQ hasn't yet reached the all time high retest expected there SPX will likely go up a few more handles while NQ does that retest. SPX 60min chart:
On the daily chart this last push up has killed the negative divergence on the RSI 5, so there is no longer a strong RSI 5 / NYMO sell signal brewing there. If we are to see another divergence develop then that would require a retracement and then another all time high retest to set that up. SPX daily chart:
I mentioned last week that RUT had broken all short term trendline resistance and I don't yet have any obvious resistance or targets there. What I will mention, though I'd be surprised to see it deliver, is a possible very bullish option that the short term rising wedge or channel on RUT has broken up with a target in the 1600 area, possibly on the way to main channel resistance, currently in the 1640 area.

Why don't I like this option? Mainly because it doesn't fit at all with SPX or NDX, but also because RUT is now again reaching the P/E ratio of 100 as an index from which it rejected so firmly last time. It's not sustainable to spend long over this extreme nosebleed average P/E, and it would be very surprising to see RUT spike up hard from it. Time will tell as always. RUT daily chart:
The ES, NQ futures charts below were done 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.

As with SPX, ES has broken slightly over obvious rising wedge resistance and is currently at the 2529 target that Stan was looking for last week. I do have a possible alternate wedge resistance trendline now in the 2536 area. ES Dec 60min chart:
This NQ chart is the main chart that I am watching at the moment, because the pattern setup there is the strongest. This is running the bull flag / falling megaphone scenario that I was talking about last week and NQ that may well reach the target at the all time high retest on NQ at 6025 within hours. No notes from today but if you look at last night's notes (2nd Oct - PM for post market), I was talking about the short term rising wedge forming on NQ. That tested wedge resistance overnight, and then wedge support again this morning, and unless the wedge breaks down then the next obvious target within the wedge would be wedge resistance, currently at 6026, just above the flag target. Short term wedge support currently in the 5985 area. NQ Dec 60min chart:
On the TF chart I was talking yesterday about the same possible setup into 1600. Not expecting that to happen but I always bear decent looking alternate scenarios in mind, particularly when the primary scenario has no obvious strong pattern. TF Dec 60min chart:
The next post will be Thursday or Friday, depending on time. Trade safe :-)

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