- 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.
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Friday 29 June 2018

The Retracement Low Is (Probably) In

We are doing our monthly free public Chart Chat on Sunday. If you'd like to attend you can sign up for that on our July Free Webinars page.

SPX reached the ideal 2680-2700 retracement low range and has rallied strongly from there with a 60min RSI 14 buy signal fixing this morning. The low isn't definitely in yet, with resistance at the 50 hour MA and daily middle band above in the 2737 and 2756 areas respectively, but this is a very strong candidate low, but a decent double bottom setup here meaning that there would be no need to retest the low as part of a bottoming process. We'll see how that goes.

Partial Premarket Video from theartofchart.net - Update on ES, NQ, SPX, NDX, RUT:
The cleanest reversal setup is on NDX, with a falling wedge / bull flag that broke up this morning, another hourly RSI 14 buy signal fixed this morning and a double bottom setup to point the way back to the high retest that would also be the minimum bull flag setup. Any retracement today will look like a buy to me. You might still be reluctant to be long yet subject to more confirmation, but this isn't a setup that I'd be at all keen to short. NDX 60min chart:
The weather is nice here in the UK for once. There's a strange yellow ball in the sky which I understand from google is called a 'sun'. Not a common sight in the UK at all so I'll be cautiously investigating this phenomenon over the next few days. Everyone have a great weekend! :-)

Wednesday 27 June 2018

Minding The Gap

We are doing the monthly free public Chart Chat on Sunday. If you'd like to attend then you can register for that on our July Free Webinars page. We are also running our annual July 4th weekend sale over the next few days, so over that period annual memberships purchased have four free months rather than the usual two. As with all our memberships, as long as the subscription is continuous, the subscription price will never be increased in the future.

After a slow start SPX is coming into the ideal low area 2680-2700 that Stan has been calling for the last few weeks. SPX is in the low window and we think that a low this week is likely.

Full Intraday Video from theartofchart.net - Update on ES, NQ, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX, EURUSD, AUDUSD, USDJPY, USDCAD:
The high today was at gap resistance, and at the 50 hour MA which was the obvious resistance area, and the final leg down should now in progress. If SPX should go under 2680 then rising support from the the early April low is now in the 2665 area. That's not a target here, but under 2680 it would be the next big support level. SPX 60min chart:

Thursday 21 June 2018

A Bull Flag Megaphone Taking Shape

Apologies for the lack of updates this week. It has been extremely busy. I should be back on a more normal schedule next week. Stan and I are doing our monthly free public webinar on FAANG stocks and key sectors tonight, and if you'd like to attend you can register for that on our June Free Webinars page.

It has been an irritating week on the indices, from a promising start on ES/SPX and NQ/NDX, with high quality H&S patterns breaking down on all four, with then the H&S patterns on NQ/NDX failing into  higher highs, and then the H&S on ES being invalidated at the highs last night, leaving the H&S on SPX as the sole survivor of the four patterns, having escaped invalidation by 0.13 handles at the highs yesterday. That still has an open target in the 2725 area.

So what is actually happening here? Well the overnight high on ES was very interesting as it established a three touch declining resistance trendline from the high. That was interesting because it suggests that a flag pattern is forming and, as long as that resistance holds, then ES should be on the way to confirm a pattern support trendline. After I recorded the video below I had a careful look to see if I could identify likely targets and I found two, both falling megaphone support alternate trendlines, and by the close today they would be in the 2728 and 2720 areas respectively. If ES trends down today, which I was talking about as a strong probability on the premarket video below, and is looking increasingly likely at the time of writing, then the target for this move is likely to be one of those trendlines.

In terms of quality I like the higher trendline better, but if the touch (and likely reverse) was to be today I would note that the lower trendline would be a strong match with the 38.2% fib retracement of the broken rising wedge in the 2720 area, and that would normally be my minimum retracement target on a broken wedge like this one. The H&S target on SPX would be satisfied on a hit of either option. If that low was to be made tomorrow then the higher trendline would be a better match.

So what would a retracement low in this area mean? Well the setup would be a clear bull flag megaphone. The low would be a clear timing match with Stan's low window for this retracement with the middle of that low window on Monday 25th June, and on a break up from the flag the minimum target would be a retest of the June high, with very possible continuation on to a retest of the all time highs on ES/SPX. We will see how this develops.

Full Premarket Video from theartofchart.net - Update on ES, NQ, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX, EURUSD, USDJPY, USDCAD, AUDUSD:
ES Sep 60min chart:

Thursday 14 June 2018

An Uncertain Decline Is Often A Bull Flag Forming

The SPX 60min RSI 14 sell signal that fixed early this week is still open, there is another on NDX and one is brewing on RUT. Furthermore there are now possible daily sell signals brewing on both NDX and RUT, and if SPX retests the June high then there will also be one brewing on SPX.

Is SPX going to retest the June high? Most likely yes. I was talking about the possibility of that happening in the video below, and on the SPX 15min chart below that there is a double top setup that is acting very strangely until you see that it is actually a perfect bull flag channel that is in fact not acting strangely at all. When that breaks up SPX should retest the high and at that stage we might have a genuine double top setup.

One thing I'd mention though is that the next cycle low window is around 25th June. The longer SPX takes to top here, the shorter and likely shallower this retracement is likely to be. The current possible double top forming now would look for the 2750-60 area, and I'd note that rising support from the early May low would be in the right area in that timeframe.

I've left the DX section in today as it's being very interesting today. Partial Intraday Video from theartofchart.net - Update on ES, NQ, TF & DX:
SPX 15min chart:
We are doing a webinar an hour after the close tonight on trading options on futures. If you'd like to attend you can register for that on our June Free Webinars page.

Monday 11 June 2018

Downside Potential Here

SPX is at a potentially significant inflection point here, with a setup for a possible sharp retracement. SPX has broken down from a short term rising wedge and formed a possible double top. A possible hourly RSI 14 sell signal is brewing and the obvious first downside target on SPX in the event of a significant reversal here would be channel support in the 2740 area. We are looking for a sharp retracement soon and it could well start here.

Full Premarket Video from theartofchart.net - Update on ES, NQ and TF, and CL, NG, GC, HG, ZB, KC, SB, CC, ZW, DX, EURUSD, GBPUSD, AUDUSD, NZDUSD, USDJPY, USDCAD:
If we see this retracement, which could last a couple of weeks and might go as low as a test of monthly pivot at 2681, then we'd be looking for a retest of the all time high on the next move up. SPX 60min chart:
Stan and I, and our options specialist colleague Matt Gardiner will be doing a webinar after the close on Thursday introducing Paragon Options, a new service we are introducing trading futures options. We'll be looking at trading those, and how that differs from trading stock options. If you'd like to attend then you can register for that on our June Free Webinars page.

Monday 4 June 2018

Filling The Island Top Gap - Take Three

We did our monthly free public Chart Chat yesterday and, if you missed that, you can see the recording posted on our June Free Webinars page.

ES/SPX has been forming a likely large bull flag over most of the last month, and the flag pattern is the unusual and very poorly named broadening formation, right angled and descending. I'm trying to think of a catchier name.

Be that as it may I like these patterns and, on ES overnight, that pattern has been starting to break up. The full target would be in the 2800-5 area, though we thinking we might see a retracement/backtest from the 2765-75 area, if the island top gap from the March high into 2752.021 can now finally be filled. Our expectation is that this gap should be filled today.

Partial Premarket Video from theartofchart.net - Update on ES, NQ and TF:

SPX 60min chart: