- WE'RE JUST RANDOM SPECKS OF DUST IN A TORNADO TO THE MARKETS .......
- CHARTISTS MUST PUT ALL BIAS ASIDE AND LET THE CHARTS DO THE TALKING OR WE'LL SEE ONLY WHAT WE WANT TO SEE
- This blog has a copy of all header posts that I publish anywhere, so that those interested in seeing what my thoughts are on the markets can find them easily.
- I will be answering questions and responding to comments, so feel free to respond to any posts and I will see your comment even if it is not on the most recent post.
- If you're interested in seeing any intraday charts I post, I do that on twitter, and my twitter handle is @shjackcharts.
- The charts in the posts are as large as I can practically make them. if you would like to look at one more closely, click on it, and the link will take you to a larger version at screencast. If you click on that again, you will get a full page version, and can use the resizing function on your browser to enlarge parts of interest further.

Tuesday, 24 April 2018

Bull Flags Breaking Up

There is a very strong rally setup coming into today, so I've decided to do an AM post this time, with the video below being the section on indices from my premarket video this morning.

The rally setup is the breaks up from bull flags on SPX, NDX and RUT yesterday afternoon and this morning, and the double bottom on SPX that needs to break and convert double bottom resistance at 2683 to fix a double bottom target in the 2705-8 area. If that delivers then all three have a decent shot at a retest of last week's rally highs. Premarket Video from theartofchart.net - Update on ES, NQ and TF:
The best setup, as happens regularly, is on RUT, with the low yesterday at rising support from the early April low, and a beautiful bull flag falling wedge that broke up at the open today. RUT 60min chart:
This is a nice setup but, if it fails, SPX will likely retest yesterday's low and may well then continue considerably lower. Bulls really need to deliver this morning if they want that retest as a fail could be ugly. Rising wedge support on RUT is in the 1557 area, and if that breaks this rally setup is likely broken too.

Friday, 20 April 2018

Another Friday, Another Inflection Point

Well SPX has finally retraced over the last couple of days, and the bull/bear line that I'm talking about on the video is rising support from the April low. That was tested as expected not long after I recorded the video and that's holding so far. On a break below this rally has likely ended unexpectedly early. If it holds then SPX should do another leg up into the 2730s and triangle resistance there. I'm leaning towards another leg up unless that trendline support breaks. We shall see. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
Here's the overall triangle setup on SPX. SPX 60min chart:
Everyone have a great weekend. :-)

Tuesday, 17 April 2018

The Three Bears

I was saying last week that a fill of the open gap from 2711.93, I'd be disregarding the Three Day Rule target (a retest of 2553.80). The Three Day Rule target technically hasn't failed yet, but the first downside scenario is likely failing, and we are now left with the remaining two scenarios.

The secondary scenario is that a large triangle is forming here, and that SPX is heading towards triangle resistance, currently in the 2745 area. As triangles are to an extent a 'Get Out Of Jail Free' card for pattern targets, on a fail there we would likely still reach the Three Day Rule target, and I'd add this to the other two exceptions when the rule triggered while a triangle was forming.

If we do see this scenario develop then as SPX moves to triangle resistance NDX and RUT may reach their IHS targets in the 6945 and 1608 areas respectively.

If SPX breaks over triangle resistance then the Three Day Rule has had the first fail, and SPX would likely reach that IHS target in the 2792 area. At that point I'd be fairly neutral on direction, though excepting at least a retracement sometime soon.

Full Intraday Video from theartofchart.net - Update on ES, NQ and TF (at the start) and then DX, CL, NG, GC, ZB, HG, KC, SB, CC, ZW, EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD and NZDUSD:
SPX 60min chart:

Thursday, 12 April 2018

In The Inflection Point

Stan and I are doing our monthly free public webinar on the Big Five and Sectors after the close tonight and we'll be looking at AMZN, AAPL, FB, NFLX, TSLA, IBB, IYR, XLE, XLF, XLK and XRT. If you'd like to attend you can register for that on our April Free Webinars. We are also of course doing our monthly free public Chart Chat on Sunday and you can register for that on the same page.

The possible triangle resistance on SPX broke and ES and SPX have both broken their respective IHS trendlines at the highs today, so all of ES/SPX, NQ/NDX and TF/RUT have now broken up from their IHS necklines. This is the inflection point I was looking at in Chart Chat on Sunday and if this is going to be a Janus bear flag reversal, then I'd expect a failure here or not too much higher. If the IHSes are for real then the respective targets on SPX/NDX and RUT would be in the 2792, 6920 and 108 areas respectively. I'll be taking the bull targets seriously if SPX reaches 2712. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
SPX 60min chart:

Wednesday, 11 April 2018

The Ephemeral Triangle

NQ/NDX and RUT/TF have now both reached their respective IHS necklines and broken slightly over them, so the possible Janus bear flag setups on both are set up and ready to fail into the retests of the previous lows. ES/SPX is the only laggard, but of course there was already a strong target at the last low there. In the video below I'm saying that ES/SPX may have topped out on this move yesterday. We'll see.

I was asked a couple of questions about a fuller explanation of Janus flags yesterday and they are a pattern of mine so they aren't written up formally anywhere yet. I tweeted a good recent example on CL and more explanation on my twitter this morning, so you can see that there if you want. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
So what is happening on SPX here if this high was made yesterday? Well Stan has been running this as a likely triangle forming and the high yesterday was at a high quality triangle resistance trendline. If so, then SPX is likely topping out here for a return to triangle support, now in the 2610 area.

One way or the other SPX has been compressing for a while here and pressure is building for a strong move out of this compression. My Three Day Rule target says the expansion will very likely be downwards, but while that stat has never failed since the start of 2007 over dozens of instances, that just means that it hasn't failed yet, as there is no such thing as a definite outcome on any setup or statistic. Fill the open breakaway gap from 2711.93 on SPX and that expansion could still be upwards. SPX 60min chart:

Tuesday, 10 April 2018

Janus Flags

In our Sunday Chart Chat I was looking at an attractive scenario for this week where ES/SPX would make a higher high this week to complete a possible IHS forming, break up slightly from that and then fail back into a minimum target at last week's low at 2553.80, also the target on the Three Day Rule triggered by Friday's clear break back below the 5dma on SPX.

What is a Janus Flag? It is a bull or bear flag that looks like a reversal pattern forming, breaks up (or down) and then rejects hard into a retest of the previous low (or high).

I've explained in detail how I see this setup, and given a likely Three Day Rule invalidation level at a fill of the open gap from 2711.93. Full Intraday Video from theartofchart.net - Update on ES, NQ and TF (at the start) and then DX, CL, NG, GC, ZB, HG, KC, SB, CC, ZW, EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD and NZDUSD:
The open breakaway gap from 2711.93 is shown on this SPX 60min chart below, as well as the part formed IHS. If the IHS was to break up and make target, then that target would be in the 2790-5 area. SPX 60min chart:
Stan and I are doing our monthly free public Chart Chat on Sunday, and on Thursday after the close will be doing our monthly free public review of the Big Five and Sectors. If you'd like to register for either or both you can do that on our April Free Webinars page.

Friday, 6 April 2018

The Three Day Rule - Day Three

It''s been a while since we last saw an example, but one of my strongest historical stats is the Three Day Rule. On this stat, there first needs to be a 2%+ decline, and then on a break back over the 5 day MA, currently at 2627, then on a clear daily closing break back below on either of the next two trading days, then there should be a retest of the previous low (2553.80), before any significant move over the previous high (currently 2672.08). There are no guarantees in trading or analysis, but with the exception of two very marginal higher lows when triangles were forming, this stat has delivered in every instance (so far) going back to the start of 2007.

Unusually I am posting one of our premarket videos for subscribers, but I have a very busy afternoon lined up, and I'm aware I haven't published much this week. This is the full video covering all 19 futures that I look at in the morning. Worth mentioning as well that I may well be away on Monday. Full Pre-Market Video from theartofchart.net - Update on ES, NQ and TF (at the start) and then DX, CL, NG, GC, ZB, HG, KC, SB, CC, ZW, EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD and NZDUSD:
SPX daily 5dma:

Thursday, 5 April 2018

Better Late Than Never

I prepared this post a while before the close today but for some reason my media computer took two hours to encode the video. Everything still relevant now so here it is.

In the interim the backtest into the 2619 area is in progress and assuming that support holds, I'm expecting a higher high to make the second high of a double top at one of the obvious resistance levels above at the monthly pivot in the 2676 area, and the daily middle band, now in the 2688 area. Looking for strong resistance at one or the other. Intraday Video from theartofchart.net - Update on ES, NQ and TF:

SPX 60min chart:

Thursday, 29 March 2018

One Down, Three To Go

Today is the end of the first quarter and the first day of the second quarter on Monday traditionally leans 75% bullish. That's worth bearing in mind here as any bullish move here may follow through on Monday.

Full Intraday Video from theartofchart.net - Update on ES, NQ and TF (at the start) and then DX, CL, NG, GC, ZB, HG, KC, SB, CC, ZW, EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD and NZDUSD:
I have a decent looking falling channel on SPX here and if the rally target is a test of channel resistance that is now in the 2680-5 area. At the speed SPX has been moving we could see that test today. SPX 15min chart:

Tuesday, 20 March 2018

FOMC Tomorrow

ES bounced at monthly pivot support yesterday and a likely bear flag is forming that on a break down should at minimum deliver a retest of yesterday's low, and likely continuation lower after that. There is a small section looking at Facebook at the end of the video today. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
FOMC is tomorrow of course, and it is possible that the Fed might say something to cheer the bulls here, though it's a little hard to see what that might be. They obviously wouldn't mention QT1, the first phase of quantitative tightening designed to reverse the QE1 through QE3 easing periods. So far that has been implemented with a great deal less fanfare than any of the QE periods, so as not to spook equity markets. Equally the economic numbers over the last month are not supporting any slowing up on interest rate tightening, though in this case I think the Fed are in any case just playing catch up so as not to fall so far behind the markets that really set interest rates, that it becomes obvious that the Fed do not actually control interest rates.

For what it's worth, the beautiful little triangle on the TNX (10yr treasury yield) hourly chart is leaning strongly towards a fastish retest of the recent highs on bond yields, with more downwards pressure on bonds, so I'd be very surprised to see an immediate reversal there. TNX 60min chart:

Monday, 19 March 2018

A Promising Start

ES never managed to break below weekly pivot support last week but the new weekly pivot moved over price and ES is now testing the monthly pivot at 2698, which is holding so far. SPX and NDX have broken their rally rising wedges and retraced 38.2% of them, and if we are to see a backtest here, which looks likely as I write, then the obvious target would be the daily middle band, now in the 2735 area.

I've included the full intraday video today as I'm running late and I like to post one of these once a week or so. Intraday Video from theartofchart.net - Update on ES, NQ and TF, DX, CL, NG, HG, GC, ZB, KC, SB, CC, ZW, EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD and NZDUSD:
On the bigger picture we are ideally looking for a move to the 2450 area, and SPX ideally makes that in four weeks or so. As and when we make a tradeable low on this move we will be looking for at least ATH retests, so anyone looking for the bearpocalypse to start here is likely to be disappointed .... again. SPX 60min chart:

Thursday, 15 March 2018

In-Between Daze

Today has been a choppy in-between day as SPX/ES has tested strong support and, so far at least, failed either to convert it to resistance and continue down, or rally strongly from it. However we are likely to see one or the other of those soon and I'm surprised that the process has taken as long as it has so far.

On the bear side is SPX filling the gap from 2738.97 that I was looking at yesterday. As I write the LOD on SPX is 2741.47, almost there, but there are no prizes for almost here. That gap needs to be filled to open the next target areas down. Our lean is that should be the way that SPX resolves out of this inflection point.

On the bull side is a failure to get down through support here, in which case a weak hourly RSI 5 buy signal has already fixed, a full size one is brewing, and on a sustained break back up over 2763 the double bottom target would be in the 2784.5 area, with an equivalent setup on NQ looking as though it might deliver a retest of the all time high there.

Price should decide one way or the other soon and we should then see the strong move from there that has failed to materialise so far today. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
SPX 60min chart:

Wednesday, 14 March 2018

Testing Key Support

Yesterday's promising start to the downtrend has continued today and brought ES & SPX down to test important trend support at the weekly pivot on ES at 2749 and the 50 hour MA on SPX now at 2751. SPX is trading about 4 handles below ES today.  A decent confirmation that support is breaking would be a fill of the open breakaway gap on SPX from 2738.97. It is of course possible that this support level won't break, so bears really need to push down through this. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
Here's the support shown on SPX. A break below opens a test of main rally rising support, now in the 2720 area. SPX 60min chart:

Tuesday, 13 March 2018

Buffing Fingernails Modestly

Stan and I were saying in the monthly free public Chart Chat on Sunday that the last day of the cycle high window was today and we were expecting to see a rally high made by the end of the day. You can see the recording of that here. There was obviously no doubt in our minds (wipes last of cold sweat from brow), and we should be putting in the first stage of that now. Hourly RSI 14 and RSI 5 sell signals fixed this morning on all of SPX, NDX and RUT, and except for RUT, the RSI 5 sell signals have reached target in this first push down. We are expecting more downside, likely a lot more downside.

I haven't posted a full intraday video for a few days, so this is the full version also including DX, CL, NG, HG, GC, ZB, KC, SB, CC, ZW, EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD & NZDUSD. I do a premarket video every day for subscribers, and a full intraday video most days, and Stan does a post market video every night.

Intraday Video from theartofchart.net - Update on ES, NQ and TF, DX, CL, NG, HG, GC, ZB, KC, SB, CC, ZW, EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD & NZDUSD:
As I write with ES at 2770, SPX is starting to break rally channel support. On a break below I have a double top target on ES at 2760.50. Ideally that would be hit today. SPX 60min chart:

Friday, 9 March 2018

The Blue Pill

ES gapped up over resistance on the NFP numbers this morning, and we are running the second option that I  was looking at on the intraday video yesterday. ES is likely to hit the rising channel resistance I was looking at yesterday and that is now in the 2785 area. Ideally that gets hit today. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
This is another inflection area and we are looking for a reversal to start from a high not much higher than this is the next couple of trading days. We shall see how that goes. ES Mar 60min chart:
Stan and I are doing our monthly free public Chart Chat on Sunday covering the usual 40 or so instruments over most major markets. If you'd like to attend you can register for that on our March Free Webinars page.

Thursday, 8 March 2018

The Thin End Of The Wedge

On the video today the first bit where I was looking at the action so far as a likely bull flag that should deliver a retest of the HOD is now obviously out of date, as the flag then broke up and made target, and we have a new HOD. That was unfortunately only of use to subscribers watching the video being recorded live, or on the subscriber twitter feed where I posted the full version soon afterwards. The shorter version takes a bit longer to produce.

For the rest of the video I am considering the case for a possible high being made here in the 2737.25 to 2741 area on ES and we are in that inflection point now. If we see a hard fail here we are looking for new 2018 lows at minimum. If we see a break up instead then we should see ES reach the 2780s next. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
I drew in a possible overall rising wedge for the rally on TF this morning and it was encouraging for a fail in this area to see the high today at that resistance trendline. We'll see. TF Mar 60min chart:
Stan and I are doing our monthly free public Chart Chat on Sunday covering the usual 40 or so instruments over most major markets. If you'd like to attend you can register for that on our March Free Webinars page.

Tuesday, 6 March 2018

Life Is What Happens ......

......... While You Are Busy Making Other Plans - Allen Saunders

The ideal day for the bears today, after yesterday's strong break over the daily middle band, would have been an AM high in the 2735-40 range on ES, then a break and conversion to resistance of 2716 on ES, and a trend day down closing the day well under the daily middle band in the 2700 area and delivering a very bearish daily middle band rejection candle.

The high this morning was low, not retesting the globex high on ES and not setting any decent hourly sell signals brewing. 2716 was then slowly converted to resistance, a process requiring a break of the level, a backtest that holds that level and then continuation in the direction of the break, but then ES found support at the weekly pivot at 2709, rejected back over 2716, reconverted that to support and continued up. This has more or less eliminated the possibility of seeing a rejection candle today, subject to presidential comments of course,

The next obvious target is a retest of the globex high on ES at 2734.5 and at that stage we will have serious possible hourly sell signals brewing. Then we see if 2735-40 resistance holds. If it does then the next move down should be a strong one. A break and conversion of 2740 opens the door to a retest of the rally high, and possible second high of a double top there.

The bears' chances here would have been better with that test this morning and a fail there. I'm keeping an open mind.


Intraday Video from theartofchart.net - Update on ES, NQ and TF:
I have drawn in three possible falling channel resistance trendlines on SPX that might be a high for this move. SPX 60min chart:

Monday, 5 March 2018

Rally Ending?

The hourly buy signals on ES, NQ, SPX and NDX all reached target today and the RSI 5 buy signal on RUT has reached target as well. Only the hourly RSI 14 buy signal on RUT hasn't yet reached target and that is weakened by fixing at the same time as the RSI 5 buy signal that has reached target. ES and SPX both had pattern targets in the 2725 area that have been reached, NDX/NQ and RUT/TF have reached minimum targets but could go a little higher on their reversal patterns.

We are expecting this to just be a rally before new 2018 lows and the next reversal back down should start soon, though very possibly from higher and not necessarily from a high made today. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
There are possible sell signals brewing on the 15min charts here, but nothing on the 60min charts so far. SPX 15min chart:

Friday, 2 March 2018

Rally Time

Full intraday video as I haven't posted this week. Looking for a rally here on equities that should run into next week. After that we should see the 2018 lows at least retested.

Intraday Video from theartofchart.net - Update on ES, NQ and TF - and CL, NG, HG, GC, ZB, DX, EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD, NZDUSD, KC, SB, CC & ZW:
Nice hourly buy signals across the board supporting the rally. Here's the one on SPX. SPX 60min chart:
Everyone have a great weekend :-)

Tuesday, 27 February 2018

Hold Or Fold

Obviously the rejection candle opportunity for bears yesterday was a one day only thing, and that day has passed. What we are seeing today is a decent little retracement that has a chance to grow into a larger backtest of the daily middle band. I'm talking about that on the video below: Intraday Video from theartofchart.net - Update on ES, NQ and TF:
The specific setup on SPX here is that this is firstly a test of a series of support levels close together. The first double support level is yesterday's low at 2753.78 and rising support from the lows and both are now broken. The other support level is the open, possible breakaway, gap from Friday's close at 2747.30. If that gap fills then the path is open to go and backtest weekly pivot at 2731, and maybe the daily middle band now at 2717. There is a decent looking H&S that on a break down would have a target in the 2724 area.

If support holds then SPX heads straight back to the highs. If the support break was to happen tonight, with an opening gap that didn't fill, then that would be a strong break and candidate island top for what might well then be a completed wave B of an ABC retracement. We'll see what happens overnight. SPX 15min chart:

Monday, 26 February 2018

Breaking Over A Daily Middle Band - Day Two

SPX and RUT both broke with confidence over their daily middle bands on Friday and such a break is a two day process. Bears get a potential 'Get Out Of Jail Free' card the next day if they can deliver a rejection candle that closes back below the middle band, and bulls need to deliver a second close over the middle band to confirm the break up. With SPX at 2773 at the time of writing and the middle band at 2721 and, with an hour of the trading day remaining, I am fairly confident that there is going to be no rejection candle today. This opens higher targets including possible all time high retests on both SPX and RUT. NDX is already close to an ATH retest, which now looks likely. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
Rejection candles are pretty common, and the bears put in a decent start to one at the low this morning, but that was bought and at this stage of the day they are most unlikely to recover. Rejections candles are a limited time offer and need to be delivered the next trading day, so at the close tonight the daily middle band is a confirmed support level. SPX daily chart:
What happens if we see an all time high retest? Well that might well be the second high of a double top, but that will be easier to call on the structure when we see the retest.

Friday, 23 February 2018

Price Is King

Since I started posting on YouTube a few weeks ago we have doubled subscribers on our channel there to slightly under 500. I have calculated that if we can continue doubling subscribers every two months for the next three years then we can overtake the current biggest YouTube star, currently at about 80 million subscribers I think. I'm certain PewDiePie is watching our relentless march towards YouTube greatness with great concern. :-)

On the video below I'm looking at the option that SPX breaks over daily middle band at the close today, something that is now looking likely. That would make a retest of the recent high at 2754.42 likely in my view, and unless we were to then see a rejection candle below the daily middle band on Monday, then we might well see continuation higher. That would suck but price makes these decisions, not analysts. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
The daily middle band has been tested exhaustively over recent days and I was saying in one of the free webinars we did last night (recordings posted on our February Free Webinars page) that I would prefer not to see another test today, as if price keeps knocking on a door long enough, it tends to open. The level, now at 2725/6 has been tested again today, and currently it appears to be breaking, though there can be no clear break until the RTH session has closed. SPX daily chart:
Everyone have a great weekend! :-)

Thursday, 22 February 2018

Still Testing SPX Middle Band Resistance

I try to post a full video once a week so I'm posting one today. If you're just interested in the equity indices I cover those at the start of the video. Stan and I are doing two free webinars tonight, the first is on trade execution 30 minutes after the RTH close, and the second is on the big five stocks and sector ETFs an hour after the close. If you'd like to see either or both you can register for those on our February Free Webinars Page. Full Intraday Video from theartofchart.net - Update on ES, NQ and TF ..... and CL, NG, HG, GC, ZB, KC, SB, CC, ZW, DX, EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD and NZDUSD:
SPX has rallied back to test the daily middle band again today, and rejected there again so far. As long as that remains the case then the likely next leg down has started, though confirmation of that only comes with the break and conversion of 2700 to resistance, which we are still waiting for. If SPX should break and convert the daily middle band then we would likely see the rally high retest that we didn't see yesterday, and bears would then need to deliver a rejection candle back below the middle band tomorrow. We shall see :-) SPX 60min chart:

Tuesday, 20 February 2018

We Will All Go Together When We Go

I remember seeing the very talented satirist Tom Lehrer on his last world tour in the 1980s, 'The Poisoning Pigeons In The Park' tour. Today's title is a small homage to one of my favorites in his repertoire, as well as a note that as and when equities are ready for the next leg down, all the main equity indices, and very possibly oil, are likely to participate. If you'd like to see the title song for this post you can see that here.

When that be? As soon as we see a break and conversion of the ES weekly pivot at 2703/4. I'm leaning towards to seeing a retest of Friday's high before we see that happen. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
All three of SPX, NDX and RUT are showing remarkably similar pattern structures from the low and all three have broken down from the rising wedges that I was looking at on Friday. These should all now be in the topping process before the next leg down. SPX 60min chart:
Tomorrow is a cycle trend day so if a high retest can be managed today, then we may see the decline start today. In the meantime I'm wondering about possible bullish triangles forming here on equity indices, and possibly CL.

Friday, 16 February 2018

Testing SPX Middle Band Resistance

I have a question for my beloved readers today and I'm hoping one of you has a good answer. I've teamed up with an options expert friend to run a directional options portfolio based main on futures options for the last three months, and we've been recording the (very impressive so far) trades and results on a spreadsheet. We'd like to move this onto a professional web based alternative that we can publish from. The setup needs to work with futures options, auto-update the options prices, and not be restricted to basic options strategies etc. Do any of you know a good way to do this? The winning reply gets three months free membership if we later launch this as a paid service, which is where this is probably heading.

Onto the equity indices. I was mentioning yesterday that the daily middle band on SPX would be an ideal target for this rally and that has been tested on both SPX and ES this morning. Some rejection there so far and it's possible that the rally high is in, though I'm sceptical about seeing a lot of downside in what remains of today, on an opex Friday, going into a three day weekend, so we'll see. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
Here's the daily middle band test on SPX. Possible hourly RSI 5 sell signals are brewing on both SPX and RUT and one has fixed on NDX. SPX daily chart:
Everyone have a great holiday weekend.

Thursday, 15 February 2018

Into The Likely Rally High Zone

A couple of announcements today. Firstly tonight's webinar at theartofchart.net has been delayed a week due to an unavoidable conflict, and will now be held on the same night as our Big Five & Sectors webinar on Thursday next week. You can register for either or both on our February Free Webinars page.

The second announcement is that Stan and I are finally starting serious work on writing a book on TA and trading futures. We have an outline and a publisher and will be trying to finish that this year, so watch this space :-)

The hourly RSI 14 buy signals on NDX and RUT have reached target, and the SPX signal has reached the possible near miss target. There is hourly negative divergence here, and all three indices are in the ideal rally high zone, we are expecting a rally high high soon and tomorrow is a possible cycle trend day on which we could see a significant decline. Discussed in detail on my intraday video below.

This is the whole intraday video covering nineteen futures and forex charts, as I haven't posted one of these in a couple of weeks, and if you are just interested in the equity indices they are at the start and there is also a possible very speculative equities decline scenario that I look at in the bonds/ZB section starting in the ninth minute. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
On RUT/TF there is a solid channel on TF that is holding so far. A 60min sell signal has already fixed on TF, and possible RSI 14 and RSI 5 sell signals are brewing on the RUT hourly chart below. This could turn at any time, though it obviously could go higher. RUT 60min chart:

Wednesday, 14 February 2018

Trendline Evolution At Work

There has been a remarkable similarity on the patterns from last Friday's low on all of ES, NQ and TF, with rising wedges forming, then breaking down. I was expecting consolidation to establish less steep support trendlines and in a remarkable convergence all three of those initial rising wedges evolved into perfect rising channel with the channel support trendlines established at the premarket spike down lows this morning. Will these make it back to channel resistance? Maybe yes, I look at options in the video below. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
On the bigger picture there is a possible double bottom setup on SPX here, but we aren't expecting that to make target, as we don't think that the retracement is done yet. What I think is more likely on on all three indices is that they are rallying to establish the declining resistance trendlines that should then hold until the retracement on each are finished. That may well need to go higher than today's highs first. SPX 60min chart:

Monday, 12 February 2018

Just Another Rally ......... Probably

Nice rally from Friday's low. Not expecting that to be the retracement low but there are fixed hourly RSI 14 buy signals that are not close to target and my lean would be that there is at least some more upside coming. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
On the daily charts RSI 5 buy signals look likely to fix at the close today. Again that is arguing either for a stronger rally here, or that lower lows won't be as definite as the ones that the indices have been making so far. SPX daily chart:
I'm preparing a post putting a strong technical argument that the bull market from the 2009 low is not finished, and having a look at where SPX is likely to be within the structure of that bull market. The post may not be out until after the close tomorrow, but the video segment will be posted on our YouTube channel and I'll be posting the link to that video on my twitter later today.

Friday, 9 February 2018

Another One Bites The Dust

In Chart Chat on Wednesday morning Stan and I were looking at the next support levels on SPX and my pick was triple support at rising support from the Feb 2016 low, and the 200dma and annual pivot levels at 2538/9, all a match with a retest of the ES globex low on Monday night. We were thinking that might well yield a bounce but that SPX would likely go lower afterwards. SPX tested that today, and is bouncing so far, but rising support from the February 2016 low is now broken, after that also broke on RUT on Tuesday morning. Both breaks are likely to follow through to the downside before this retracement is finished. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
What an interesting year it has been so far. It's nice to see a bit of life return to the tape. Does this mean that the bull market is over? Unlikely in my view. I'll be doing a post at the weekend, if I have time, to show why that is. SPX daily chart:
It has been a very intense week. Everyone have a great weekend :-)

Thursday, 8 February 2018

On To The Retest

ES made Stan's target area 2700-40 for the rally and all three of ES, NQ and TF have turned back down towards likely retests of the retracement lows so far. There is still a possible case for high retests on these to make double tops to deliver that move, but I was only assigning a maximum one in three to that scenario on the video below, and the odds have reduced further since then. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
The nicest setup to get there is a decent quality H&S on NQ that has broken down with a target at the low retest. Looking for this to make target soon, ideally this week, though I'm not expecting the retest to proceed as vigorously as the original low. NQ Mar 60min chart:

Tuesday, 6 February 2018

A Significant Technical Break

Well that was interesting yesterday, and that was a really impressive move on equity indices that finally ended the longest trading period in SPX history without a 5% retracement. The mindless bullish euphoria has ended for the moment and overall we should be back in a more two way market environment for a while. In terms of this current move we may now have started a retracement to take us into April or May.

In the video below I'm looking at today's rally. The obvious target on ES would be the 50% retracement in the 2700 area and Stan is looking at the 2700-40 area. After that the odds favor a retest of the overnight lows, which were of course well below yesterday's RTH lows. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
The first big support trendline was broken at the open this morning and that was rising wedge support on RUT from the early 2016 low. That's likely to follow through to the downside after this rally. RUT daily chart:
Is this the start of a crash? Unlikely, as this high is missing some important elements that would usually be seen at a serious top, but we may well be building towards such a serious top within a year or two. This is more akin to the bears starting to wake up after a long hibernation. They're going to need some breakfast, a lot of coffee and some warm-up exercise before they get seriously to work, and we're likely to see equity indices make new all time highs all round before that larger short setup is cooked.

Was the low yesterday a significant low? Unlikely. Again at least some more work to the downside is likely required before equity indices can have another run at the all time highs.

Monday, 5 February 2018

Seven Percent And Counting

I was looking for a decline of more than 5% from the high on SPX to signal that the market was normalising into a more two way trading environment, and that has been hit today, and then some. On the video below I was noting the large amount of positive divergence on various charts and liking the odds for a rally that has not yet materialised, with SPX punching 1% below the daily lower band at the LOD so far.

This is impressive stuff, and the advances/declines level today is suggesting that we may see a repeat of Friday afternoon with a close at or near the low. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
Are there lower targets that are opening up? Yes. RUT broke the first support trendline today and that opens a strong target at the next trendline support now in the 1470 area, bracketed by the yearly pivot at 1476/7 and the 200dma now at 1460. We should see a decent rally soon. After that we likely will need another leg down. RUT daily chart:
Stan and I did our free monthly Chart Chat at theartofchart.net yesterday. If you missed that you can see the recording on our February Free Webinars page.

Friday, 2 February 2018

Well That Delivered Faster Than Expected

Stan and I are doing our free monthly Chart Chat on Sunday at theartofchart.net. We'll be covering the usual wide range of instruments and you can register for that on our February Free Webinars page.

No futures charts or video this afternoon as I tripped over this morning while trying to find somewhere in an unfamiliar city using Google Maps. My phone smashed and that, needless to say, is my primary authentication device for accessing my futures charts.

Only a temporary setback as I have a very good iPhone/iPad repair place, and I am a favorite customer with a bulk discount due to my household having a lot of apple devices, mainly being used by three rather careless/clumsy kids. I'll have the iPhone back tomorrow so I'm inclined to interpret this as a sign from above suggesting that I might consider going to bed early tonight. For a fact, I am rather tired so I think I'll be doing that.

On to the markets then, going old school with no futures charts due to my morning mishap, and may I just say how delighted I am to see the bloodbath on the equity indices today. This was what I was hoping for when the termination triangles on SPX and NDX were spiking up a week ago. If we saw a sharp retracement from those triangle highs then we might well be watching the start of a two way market returning on equities, and those are a lot more interesting than one way markets. So where are we now on SPX, NDX and RUT?

I showed the H&S on NDX in my post yesterday. Obviously that has broken down hard and is close to the target in the 6775 area. That will likely be reached today. NDX 60min chart:
There is a less high quality H&S on SPX with a target in the 2762 area and that target has been reached as I have been writing this. SPX 60min chart:
On RUT the H&S is low quality, and the main target that I am watching is the rising wedge support trendline from the August low, currently in the 1544 area. If that breaks then the low quality H&S target would be in the 1522 area. That trendline in the 1544 area is strong support however and may hold. RUT 60min chart:
I'm hoping to see at least a 5% retracement on SPX from last week's ATH to this retracement low, just to show that this may be returning to two way trade status. That would need a retracement low under 2729.22. We'll see whether I get it. Everyone have a great weekend. :-)

Thursday, 1 February 2018

Likely Daily Middle Band Test Next

ES/SPX just consolidating here at the moment, though if there is a break and conversion of the 50 hour MA now at 2841 that would open a test of the open breakaway gap down from 2853.53. In the absence of a break down the obvious next target would be the daily middle band in the 2800 area. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
On the bear side there is now a very decent H&S formed on NDX that on a sustained break down below 6900 would look for the 6775 area. If this delivers then it may well carry the others lower. NDX 60min chart:
Stan and I are doing our free monthly Chart Chat on Sunday at theartofchart.net. We'll be covering the usual wide range of instruments and you can register for that on our February Free Webinars page.

Tuesday, 30 January 2018

Island Top on SPX

Well obviously SPX didn't do the higher high that I would have preferred, and this morning's gap down broke down through rising wedge support and also gapped back through the open breakaway gap up from 2839.25. This currently leaves a decent quality island top on SPX and an open breakaway gap down from 2853.53 that I wouldn't expect to see filled until the current decline is finished.

No clear reversal pattern yet, though there is a poor to medium quality H&S option that I have marked on the chart below. The minimum targets I would generally be looking for on a break of a rising wedge like this are the 38.2% or 50% retracement targets in the 2797 or 2773 areas respectively. SPX 60min chart:
Are there any important support levels that didn't break this morning? Yes, rising wedge support on TF has been tested but not yet broken, and there is a possible 60min buy signal brewing there that I'm watching with interest. I'm not expecting a strong reversal to start here but this does give the bulls a potential opening. We'll see. TF Mar 60min chart:

Monday, 29 January 2018

Non-Verbal Communication

I had an interesting question on my twitter that I answered this morning, and it was in response to my tweet at the open on Friday saying that both ES and NQ had formed clear bullish triangles and that I was expecting ATH retests on both. The question was from later in the day when the ATH retests had been done and both indices continued up in a trend day. The question was why the outlook had changed, and my reply this morning was to point out that I had tweeted that I was expecting the retests, but that I had never added that ES and NQ would reverse there. The outlook had not therefore changed. I had expanded on that in Friday's intraday video before the main move up, but there's only so much you can put into a tweet. What was interesting about the question is how people read beyond what is actually said. Something I see regularly.

The question today is whether we are seeing an inside day before a higher high (preferred option), or whether the triangle thrust has already ended. The dividing line on ES for me is the break and conversion of the new weekly pivot at 2851. If that turns resistance then ES likely continues down. In this context these triangles are likely termination patterns, so the obvious move after the triangle thrusts end is to deliver a retracement so large that it can be seen with the naked eye. It's been a while since we saw one of those, so that would certainly be an interesting change of pace. Intraday Video from theartofchart.net - Update on ES, NQ and TF:
How does this setup look on SPX? Well the first thing to note is that trendline resistance on SPX was hit at the high on Friday, and that may mean that trendline support, currently in the 2848 area needs to be tested before any higher high. That would mean a test of the ES weekly pivot if seen today or earlyish tomorrow. The bull/bear line on SPX is a little lower though, with that trendline support first, but clear backup support at the open breakaway gap from 2839.25. If that gap gets filled then the triangle thrust will have been fully retraced and, if these triangles were termination patterns (usually but not always), then a significant swing high should be in. SPX 60min chart:
Stan and I are doing our free monthly Chart Chat on Sunday at theartofchart.net. We'll be covering the usual wide range of instruments and you can register for that on our February Free Webinars page. If you aren't already watching The Weekly Call regularly then you can see this week's edition here. That's now up 296% trading futures since October 2016 and is free. If you trade futures you should really think about following that. That's updated once a week and you can either go to our blog to find that here, or take the update link from my twitter every Monday morning.

Friday, 26 January 2018

... And To Finish Monsieur, A Wafer Thin Triangle

I said on my twitter this morning near the open that both ES and NQ had formed bullish triangles that should at minimum deliver full retests of the all time highs on both in the near future. ES did a new all time high this morning and NQ has now scraped a new ATH by a tick this afternoon. Those are the minimum targets made and we could see a reversal here, though obviously we may not, and historically even if we do, significant declines on Friday afternoons are a rarity.

I have a quick look at how these triangles tend to behave on the video below and would also note that these triangle thrusts tend to be termination moves, and if that is the case here, then after the triangle thrust is retraced, ES and NQ are likely to continue down into what might at least be a retracement that lasts more than a day. Who knows, or dares to dream, or can even remember what such a retracement might look like? :-)

Intraday Video from theartofchart.net - Update on ES, NQ and TF:
If NQ was to reverse here there is a beautiful possible double top setup that on a sustained break below 6888 would look for the 6770 area. NQ Mar 60min chart:
Everyone have a great weekend. :-)

Thursday, 25 January 2018

Watching the SPX Rising Wedge

I posted my premarket video today as I haven't done that in a while, and in part that's because I'm not well and trying to protect my voice today, so it makes sense not to do an intraday video today.

The analysis of equity indices is at the start of the video and I've left in the other sixteen instruments I cover every morning in these premarket videos at theartofchart.net. If you're interested, there are interesting things happening on DX & USD pairs, CL, GC, ZB & HG particularly.

Premarket Video - Update on ES, NQ, TF, and CL, NG, HG, GC, ZB, DX, EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD, NZDUSD, KC, SB, CC & ZW:
I haven't been showing enough SPX charts recently, so here is what the rising wedge looks like on the SPX chart. Forming nicely, and wedge support is now in the 2831 area. Wedge resistance is now in the 2862 area, and would be the obvious next target if wedge doesn't doesn't break first. 60min RSI 14 sell signal fixed and I'm leaning towards at least a retest of the ATH even if SPX is topping out short term. SPX 60min chart:

Wednesday, 24 January 2018

The Pig That Flew

ES made a higher high this morning, slightly overthrowing wedge resistance, which could need to be slightly redrawn, and then rejected into a test of wedge support, reversing back up there exactly. That has delivered the move I was looking for yesterday, but if we are really seeing something significant change, then there will need to be a round two. The characteristic bear fail in 2017 was to do the first decline in a sequence, and then resume the uptrend without delivering a follow-up. The next test is to see whether that happens again here. The NQ chart is encouraging there, as the NQ rising wedge broke support at the LOD, and that would generally follow through. Intraday Video - Update on ES, NQ and TF:
In the short term ES is either putting in the right shoulder on an H&S that would look for the 2795 area on a sustained break below 2825, or is breaking up from a small IHS with a target at a retest of the ATH. At the time of writing ES still in that inflection area. ES Mar 60min chart:

Tuesday, 23 January 2018

The Temporary Oxymoron

ES hit my preferred resistance trendline overnight and then again at the high this morning. There are now high quality rising wedges on ES, NQ and TF and, strange as it seems to use these words in this sequence, this is the nicest short term bear setup that I've seen in months. Looked at in detail on the video below. Intraday Video - Update on ES, NQ and TF:
How far does this bear setup extend? Well rising wedge support on ES is now in the 2816 area and this setup may only be good for a test of that trendline so we'll see. ES Mar 60min chart:

Monday, 22 January 2018

Onwards and Upwards

I tend to look at any bear setups lately with a very sceptical eye, and the nice looking nested double top setups on ES and NQ that last week closed with didn't long survive the start of trading this morning. I posted on my twitter before the open that there was a high quality support trendline on ES in the 2805 area that would need to be broken to open the possibility of further downside, and that was not broken. In my look at ES in today's intraday video I am looking at two possible matching resistance trendlines, currently in the 2833 and 2840 areas, but rising of course. Intraday Video - Update on ES, NQ and TF:
I often watch RUT/TF for guidance as to where equities are in a trend and that is still looking reassuringly boring, though that's very much a relative word talking about an index currently close to a P/E of 140. RUT/TF is currently reaching the high retest that I was looking for after Tuesday's sharp decline, and that could be the second high of a modest double top. TF Mar 60min chart:








Tuesday, 16 January 2018

Some Writing On A Wall Somewhere

Well it's been a while but something interesting finally happened on equities today with an AM high that died into a halfway decent decline. Rising support on SPX from the late December low was broken and we may well now be in the topping process for a larger retracement before subsequent higher highs.

This one is mainly interesting because if seen this should deliver a decent buyable dip, but that would be interesting to see. The high after that dip might be more interesting for a swing trade. Intraday Video - Update on ES, NQ and TF + others:
It's a measure of how strong this move up has been that a 40 handle pullback failed to reach the 50 hour MA on SPX, now at 2756. If this move is topping out, the obvious topping sequence would be a retest of the high and marginal new ATH before a move to test rising support from the November low, currently in the 2712 area. SPX 60min chart:
I've posted my full intraday video as I aim to do that once a week. Normally I'll just be posting the equity index section. 

Friday, 12 January 2018

Happy vs Mambo #5

I hope everyone is looking forward to the holiday weekend. I know I am, and I am planning to celebrate on Monday by moving a particularly large wardrobe from my daughter's bedroom, and replacing it with a rather nice antique desk. Life can get pretty wild at Jack's house. :-)

I was talking about rising wedge resistance on ES yesterday and that trendline has been reached and overthrown today. NQ has reached a decent quality rising wedge resistance trendline as well and TF may have topped out already. We may well see a reversal here, though whether it lasts more than the usual day or two is another matter. Personally I'll be regarding equity indices as possibly being in a two way market again only after we see a 5% pullback, and I'm aware that could take a while longer.

Intraday Video - Update on ES, NQ and TF:
Regardless of any retracement here, Stan and I would be expecting higher highs afterwards. The SPX daily chart SPX daily chart:
I'll leave you with a very funny mashup video that I found this week to start the holiday weekend:




Thursday, 11 January 2018

Resistance Trendlines

The little retracement yesterday made the targets on the 60min sell signals on ES and NQ, and denied SPX a record on the number of consecutive all time highs at the start of a year. However it is likely that in a week or so SPX will complete the longest ever period without a 5% retracement.

A decent three touch resistance trendline was established on ES on Monday, and I was looking for yesterday's retracement to establish a corresponding support trendline. That is now done and I have a working rising wedge on ES with wedge resistance now at 2775 if ES can clear Stan's resistance in the 2775 area. NQ and TF both also looking interesting and I cover all three in the video.

Intraday Video - Update on ES, NQ and TF:
Here is the rising wedge, and it's a decent pattern. We'll see how it does. Rising wedge support is now at 2749. ES Mar 60min chart:
Stan and I are doing a free educational webinar an hour after the close tonight at the theartofchart.net looking at translating technical analysis into profitable trades. If you'd like to attend you can register for that here.

Tuesday, 9 January 2018

A Polite Cough

I've been ill or recovering much of the new year so far, as has Stan, and much of the western world as far as I can tell, and I've managed to keep up with my main work at theartofchart.net but this is an unusually late first post for the year.

That's not the polite cough that I'm referring to in the title though. SPX and ES have been on both daily RSI 14 and RSI 5 sell signals since the end of 2017 and a polite cough to the upside would at this stage be all that is required to kill the underlying RSI divergences and fail those signals. We may well see that happen today, though there is at least some reason to think that bears might be able to pull off a last minute decline to save them from that failure today.

I look at that in my premarket video this morning, though with the observation that it's not a trade I'm taking. I've included the whole video today so if you're interested you can see which other trades I do think are interesting, notably CL and KC today, and managing existing trades in ZB and NG. The part on equity indices is covered in the first five minutes. Premarket Video - Update on ES, NQ and TF:
To fail the daily sell signals requires the respective RSIs to close the day above the initial RSI spike used in the signal. As you can see, SPX is very close to managing that. SPX daily chart:
I won't be holding my breath waiting for a decline in equity indices today but you never know. If we do see a decline Stan and I are still looking higher afterwards.