- 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
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Wednesday, 15 May 2019

X Marks The (Ideal) Spot

Before the open this morning I was cautiously predicting that ES would rally today to a higher high than yesterday, ideally failing today at a high in the 2865-9 area. As it happened the low of the day was happening at the time on ES, slightly before the RTH open, and ES is now testing yesterday's high. So far, so good.

Full Premarket Video from theartofchart.net - Updates on ES, NQ, RTY, DAX, ESTX50, SPX, NDX, RUT, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX, EURUSD, USDJPY, USDCAD, AUDUSD:
The scenario I was looking at then and now was a modest higher low and then a modest higher high to form a bear flag channel into a test of declining resistance from the highs on SPX. I have tentatively marked an X on the SPX 5min chart the ideal time and level for SPX to top out today and we'll whether that delivers exactly in the next hour or so. If not there is some wiggle room. 

SPX 5min chart: 
On the hourly chart I show the overall falling megaphone forming from the high so far. Declining resistance and the 50 hour MA are effectively the same resistance area at the moment.

SPX 60min chart: 
In the event that declining resistance and the 50 hour MA are broken and converted to support, which is possible but not looking particularly likely at the moment, then resistance higher is at the daily middle band, currently 2903 area, and the monthly pivot at 2914. SPX daily chart: 
An hour after the close tomorrow Stan and I are doing our free monthly public webinar on big five and sectors, covering AAPL, AMZN, FB, GOOG, NFLX, TSLA, IBB, IYR, XLE, XLF, XLK and XRT. Given the current market action that should be pretty interesting, and if you'd like to attend you can register for that here, or on our May Free Webinars page.

Monday, 13 May 2019

The Battles Of The Band

On Thursday before I wrote my post SPX went a few handles below the daily 3sd lower band, and as I'd generally expect we saw a strong rally from there. On Friday, somewhat to my surprise SPX again went a few handles below the daily 3sd lower band, and we then saw an even stronger rally off that low. This morning, with the daily 3sd lower band currently at 2816, the current low of the day is a few handles lower and we're probably going to see another rally, though it's hard to say whether it will be as strong as the others.

Obviously the daily middle band is now turning down, and the lower it turns and the wider the bands become, the further down the daily 3sd lower band will extend, SPX could just keep riding this down.

The current level is important though. I was asked a couple of weeks ago where I would expect the retracement to go, and I gave two targets. The first target is the current area, 2800-20, marked with the purple band on the SPX hourly chart below as an established strong support/resistance level. The second and preferred target is the 2722 area, at the full retracement of the rising wedge from the March low, and the 38.25 fib retracement of the rising wedge from the December low, also a possible larger H&S neckline. Stan  ran the cycles last Thursday night with updated data and the next cycle window is a low window in two weeks. That is where I would like to see SPX at that low.

In the meantime I'm still looking for a possible wave B retracement, with the caveat that we may already have seen a very fast B wave rally on Friday. If that is not yet done I'd be looking for strong resistance at the daily middle band, now at 2909, and the monthly pivot at 2914. A break and conversion of those levels to support could trigger an ATH retest.

SPX daily chart:
On the hourly chart SPX is testing a big support zone here, and this would be an obvious level to rally from. I'd note that hourly RSI 14 buy signals fixed on all of SPX, NDX, and RUT on Friday though of course a very strong trend can overwhelm these. SPX is testing a high quality falling megaphone support trendline that may hold.

SPX 60min chart:
No current divergence on the ES 60min chart, though ES is testing trendline support here as well.

ES Jun 60min chart:
One thing I was looking at on Friday that was encouraging for a rally on equities here was the strong reversal setup on USDJPY formed on the initial break of major double top support and annual pivot test. A 60min buy signal fixed and a high quality double bottom setup formed. Obviously there is a very decent correlation between USDJPY and SPX. Overnight that long setup fell apart with a strong break below the annual pivot towards the double top target considerably lower at 106. Obviously that is not that encouraging for a strong rally, though it is encouraging for my main target in the 2722 area being reached. We will see.

USDJPY 60min chart:
Regardless of a possible stronger rally here, SPX is trading under the daily 3sd lower lower band as I write, that is strong support for today and on a daily lower band ride we would almost always see a test of the daily 2sd lower band at some point during the day. That is currently at 2846.

An hour after the close on Thursday Stan and I are doing our free monthly public webinar on big five and sectors, covering AAPL, AMZN, FB, GOOG, NFLX, TSLA, IBB, IYR, XLE, XLF, XLK and XRT. Given the current market action that should be pretty interesting, and if you'd like to attend you can register for that here, or on our May Free Webinars page.

Thursday, 9 May 2019

Taking Stock Here

Last week I was looking at support that needed to be broken at the SPX daily middle band to open further downside and obviously SPX did that and could be at or close to the wave A low here, looking then for a B wave rally, and then a C wave down into the next low window and to complete the current move. On Sunday's free public Chart Chat I was talking about a possible H&S target in the 2840 area which was reached at the lows this morning. If you missed Sunday's Chart Chat or would like to see that again, that is posted on our May Free Webinars page.

We hold a subscriber only webinar every month at which we answer any questions attendees have, and review important markets in response to those questions, and we are holding one tonight at which, this time only, all are welcome. So if you'd like to see that you can register for that on our May Free Webinars page or you can register to attend using this direct link.

So where are we up to on the SPX daily chart? Well the short term H&S target at 2840 has been reached and the daily RSI 5 sell signal has reached target. The low today was just under the 3sd daily lower band, currently at 2839, and SPX has also currently broken below the 50dma now at 2859. If the B wave has now started then the rally should respect either 2900 or the monthly pivot at 2914. A break and conversion of the monthly pivot at 2914 to support at this stage might well finish this move early and deliver another all time high retest. After the Wave B rally we would ideally see a high latest Monday, down into the next cycle low to be made middle to end of next week.

As I was saying on Chart Chat, my ideal target for that low would be at the 38.2% retracement and retest of the March low at 2722, but I also mentioned possible support in the 2800-20 area, and a possible alternate H&S neckline in the 2785 area.

SPX daily chart:
In the short term the current low is now on any hourly or daily positive divergence so while the Wave A low may be in, it is unlikely that the main retracement low is in. Any rally here should just be a rally before lower lows in the near future. We shall see. 

SPX 60min chart: 
Everyone is welcome at tonight's webinar an hour after the close. Hopefully I'll see you there

Thursday, 2 May 2019

Important Support Breaks

Since my post a week ago SPX has retested the all time high as expected and made a marginal higher high, the rising wedge from the December low has broken down, the second daily RSI 5 sell signal since the December low has fixed, the first having played out into the March low, SPX has broken important short term trend support at the 50 hour MA for the first time since March, and backtested that as resistance, and also broken the weekly pivot at 2925.

Today's Premarket Video from theartofchart.net - Updates on ES, NQ, RTY, DAX, ESTX50, SPX, NDX, RUT, CL, NG, GC, SI, HG, ZB, DX, :

So what now, as we move into the next cycle low period expected in a couple of weeks? Well the minimum fibonacci retracement target I'm looking for on the breakdown of the wedge is the 38.2% target at 2722 which, if seen, would also be an exact retest of the March low and the possible large H&S neckline there. Ideally the next low would be there, with a right shoulder bounce back into (ideally) the 2868 area into the June cycle high window, though I have an alternate possibility for the May low in the 2820 area. That is assuming of course that shorter term support at the daily middle band, tested at the low today, can be broken.

SPX daily chart:
In the short term the hourly and daily sell signals are close to played out and we could see a rally here. Ideally the 50 hour MA, now at 2930 would hold as resistance as it did at the AM high today, and SPX would continue down from there. A sustained break back over 2930 could deliver yet another high retest, which would be annoying, but might of course be needed to set up a double top to deliver the next leg down.

SPX 60min chart:
If we do see a sustained rally from the low this morning, I do have a possible ES 60min buy signal brewing to help deliver that high retest. We will see.

ES Jun 60min chart:
Stan and I are doing our monthly free public Chart Chat on Sunday looking at the usual very wide range of instruments across indices, bonds, metals, energies, currencies, cryptos and other commodities. If you'd like to attend you can register for that on our May Free Webinars page.

Wednesday, 24 April 2019

The SPX All Time High Retest

At the end of every year Stan and I do a public webinar where we look at the more likely options for price moves on indices, bonds, forex, metals, energies and other commodities over the coming year. At the one we recorded on 30th December 2018 we were asked a question as to what could invalidate the scenario that SPX was in an ongoing bear market and I gave the reply below talking about the important resistance at the monthly middle band in an ongoing market.

Excerpt from 2019 Outlook public webinar recorded 30th December 2018 looking at the SPX monthly middle band in bear markets. :
I followed that up with a post the next day on New Year's Eve (no, I don't get out much) talking more about that,  with the observation that if SPX closed a month significantly back above the monthly middle band on the rally from the low, then the odds would strongly favor a retest of the all time high before any significant lower lows. You can see that post here. I then followed this through into the close back above the monthly middle band at the end of January and since in other posts.

SPX monthly chart:
I was expecting this current swing high to be a lower high under the SPX all time high on the basis of the pattern setup and daily RSI divergences across multiple indices and while yesterday's trend up day hasn't much changed the pattern setup, it did fail the fixed daily and hourly sell signals and apart from the daily RSI 5 sell signal on ES that just survived the RSI spikes, there is now no negative divergence on the daily or hourly charts on SPX, NDX or RUT or associated futures. The odds favor needing some or all of that to be re-established, and to do that SPX will need a retracement and then a higher high, which at this stage would almost certainly require a retest of the all time high on SPX at 2940.91.

SPX daily chart:
There have been a slight modifications to the support and resistance trendlines on the rising wedge on SPX with the latest move up but while wedge support is now once again unbroken, wedge resistance is again being slightly overthrown. I'd note that wedge support and resistance are due to intersect before the end of April, so a high within this wedge should be very close indeed, and I'm expecting the SPX all time high retest this week. SPX 60min chart:
Stan and I are doing a webinar an hour after a close tonight that is the next in our series on trading commodities. We'll be looking tonight at possible trades on copper, oil and coffee. If you'd like to attend you can register for that here, or on our April Free Webinars page.

Monday, 22 April 2019

Topping Is A Process

In my premarket video this morning I was looking at key support and resistance to define what we were likely to see on SPX this week. Resistance I put at the new weekly pivot at 2907.7. ES was opening the week below this and if that held as resistance, then this swing high might be behind us. That has not held as resistance, ES is back above it, at 2910 at the time of writing, and WP is currently holding as support. This opens a very possible retest of the 2019 high and likely at least marginal higher high above that.

ES Jun 60min:
Support is at the always important 50 hour moving average, currently in the 2890 area and strong support through April so far.

SPX 60min chart:
Just below that is the open breakaway gap from 2888.32, tested multiple times since the breakaway gap up on 12th April and holding so far. On a fill of that gap rising wedge support from the March low is now in the 2875 area. SPX 15min chart:
On the bull side I have a strong stat that I called at the start of February, on the break back over the SPX monthly middle band, looking for a retest of the all time high. That doesn't need to be done right now, but obviously SPX is not far away from the all time high at 2940.91. On the bear side the clear rising wedges from the December low on SPX and ES have both broken down, there is negative divergence almost across the board of US indices and a daily RSI 5 sell signal on ES has already fixed.

Stan and I are doing a webinar an hour after a close on Wednesday that is the next in our series on trading commodities. If you'd like to attend you can register for that here, or on our April Free Webinars page.

Thursday, 18 April 2019

Roll On The Weekend

SPX has spent the week inching through the topping process, with some progress particularly yesterday and today. Yet another higher high may be needed, as I was suggesting in my premarket video this morning. That is below with an update on ES and the usual 21 other futures charts.

Full Premarket Video from theartofchart.net - Updates on ES, NQ, RTY, DAX, ESTX50, SPX, NDX, RUT, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX, EURUSD, USDJPY, USDCAD, AUDUSD:
On the 15min chart the obvious next target would be wedge support, now in the 2871 area. Current support is the open gap from 2888.32, that has been tested today and yesterday and the next move may be to retest the highs to make a second high of a small double top before that open gap is filled to start the first decent move down. SPX 15min chart:
On the 60min chart there has been an RSI 14 sell signal fixed for a few days. If that was not already the case another would have fixed yesterday. The rising wedge from the December low has overthrown and then rising wedge support broke down slightly this morning. This should be at a late stage in the topping process. SPX 60min chart:
The daily RSI 5 sell signal on SPX that started brewing on the break to a higher high last Friday hasn't yet fixed, but daily RSI 5 sell signals have now fixed on ES and RUT. More should fix soon. SPX daily chart:
One thing I would mention is that NDX made a new all time high this week. Has that increased the chance that SPX will make a new all time high before this next turn down? Yes, I think so, but that's still not the most likely thing to see at the high in my opinion. We will no doubt see next week.

Stan and I are doing a free public webinar an hour after the close tonight on our big five and sectors service. We'll be reviewing AAPL, AMZN, FB, GOOG, 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 page.

Either way, everyone have a great holiday weekend! :-)

Friday, 12 April 2019

Stick A Fork In It

On Tuesday I was talking about the likely outcomes if SPX/ES managed either to convert the weekly pivot (2879.50) to resistance or failed in that attempt, and the likely outcome in the event that WP held as support was a full retest of the swing high and likely marginal higher high. WP held as support then and, after a near miss yesterday, the full retest and higher high has been seen today. So where is this setup now?

Well as of the highs this morning all four of the rising wedges on SPX and ES from the December and March lows respectively have now slightly overthrown their wedge resistance trendlines. Hourly sell signals are fixed on SPX and RUT here, and daily sell signals are now brewing on all of SPX, NDX and RUT. This setup looks very ready to turn down here. 

On the ES chart I'm wondering about a possible HOD retest to set up negative divergence on the ES hourly RSI. ES Jun 60min chart: 
On the SPX hourly chart I'd note that the low this week was also at a test of short term trend support at the 50 hour MA. That is now in the 2885 area and a break and conversion of this level to resistance is the first step in any serious reversal on SPX. Watching for that SPX 60min chart: 
Daily negative divergence on SPX was lost on the spike up into the last high. That is now back and I'm expecting this to fix soon and deliver a decent decline into May. SPX daily chart: 
Does SPX have to turn here? Will it be forced to reverse course by the awesome power of my mighty trendlines? Well, that's not really the way these things work, but the odds at this stage heavily favor reversal before we see a retest of the all time high now not far above, though my monthly middle band stat that I called at the end of January does have me expecting an all time high retest this year, very possibly in the summer after a low in May. 

Everyone have a great weekend! I know I will :-)

Tuesday, 9 April 2019

Looking At Support Levels

This really is one of the most nicely formed trendline highs on SPX/ES here that I've seen in a while and, so far at least, trendline resistance is holding like a champ. As long as that remains the case we should either be starting the first swing down now or, if the weekly pivot on ES at 2879.50 can't be broken and converted to resistance on this test, we would likely need one more high retest to complete a slightly larger double top than the one that has already formed and broken down on both SPX and ES.

The short term setup here is a double top that might be a Janus bull flag. That's a pattern of mine and I haven't yet found time to write a definition page with examples but the short version is that a double top has formed and broken down slightly. At this stage SPX either heads to the double top target, or rejects back into a full high retest. One of those two scenarios should be next. I talked about the setup here and support levels in my premarket video this morning.

Full Premarket Video from theartofchart.net - Updates on ES, NQ, RTY, DAX, ESTX50, SPX, NDX, RUT, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX, EURUSD, USDJPY, USDCAD, AUDUSD:
Having said that, I'd like to reflect on the full beauty of the trendline setup here. The strongest setups are a match on both SPX and ES and that is most definitely the case here. On ES the main rising wedge from the December low has overthrown slightly at this high. Wedge support is currently in the 2840 area. ES Jun daily chart:
The smaller wedge from the March low saw a perfect hit of wedge resistance at the high. Wedge support is now also in the 2840 area. ES Jun 60min chart:
On the rising wedge from the December low on SPX there was a perfect hit of wedge resistance at this high. Wedge support is now in the 2850 area. SPX 60min chart
On the smaller wedge from the March low there was also a perfect hit of wedge resistance at the high. Wedge support is now in the 2835 area. SPX 15min chart:
All these rising wedge support trendlines are currently in the 2835-45 SPX area, and will need to be broken to open the downside.

Stan and I were planning to do a free public webinar of Big Five and Sectors (AAPL, AMZN, FB, GOOG, NFLX, TSLA + six sector indices) after the close on Thursday but my internet connection where I will be on Thursday night might not be good enough so we have delayed the webinar until Thursday 18th April. If you'd like to see that you can register for it on our April Free Webinars page. The connection will definitely be good enough to write a post, so I'm planning the next post on on Friday.

Friday, 5 April 2019

So Here We Are Again

On Tuesday I was looking at the obvious resistance trendlines on SPX that might be hit this week in the 2885-2900 area and I've been watching those since. This morning they have been hit at 2891/2 with a possible hourly RSI 14 sell signal brewing, so this is an important inflection point and possible swing high area. I talked about that before the open this morning and this is the full version below of my premarket video also covering the usual wide array of future and forex instruments.

Full Premarket Video from theartofchart.net - Updates on ES, NQ, RTY, DAX, ESTX50, SPX, NDX, RUT, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX, EURUSD, USDJPY, USDCAD, AUDUSD:
On the 60min chart the rising wedge resistance hit is pattern resistance for the move up from the December low. We currently have a precise hit of the trendline but there is always a possibility of a bearish overthrow of course, so SPX could go a little higher. SPX 60min chart:
The hit on the smaller rising wedge resistance trendline from the 2722 low is equally precise, but equally  could overthrow. SPX 15min chart:
In terms of negative divergence there are already SPX daily (weak) RSI 14, hourly RSI 5 and 15min RSI 14 sell signals fixed, with possible weekly RSI 5, hourly RSI 14 and 5min RSI 14 sell signals brewing here. This would be a great place to see the turn. we shall see. :-)

Stan and I are doing our monthly free public Chart Chat on Sunday afternoon. If you'd like to attend you can register for that on our April Free Webinars page. Everyone have a great weekend!

Tuesday, 2 April 2019

Topping Options

The short term resistance on the SPX 5dma and hourly RSI 14 that held for much of last week eventually broke and delivered the high retest and marginal higher high that I was looking for in the event of that break. So what now?

Well I'm expecting this to be the second high of a double top or possibly making the head on an H&S. 15min sell signals have fixed on SPX and an hourly sell signal has fixed this morning on ES. This high could already be in, and the rising wedge on ES from the last low has now broken down, which is promising. A small double top has broken down slightly towards a possible H&S neckline in the 2854 area, and there is now a substantial double top in place which on a sustained break below 2789 would look for alternate targets in either the 2728 or 2706 area.

ES Jun 60min chart:
However I would note that there is at least some reason to think that SPX/ES might need to go a little higher. There is currently no negative divergence on the SPX hourly RSIs and if we were to see a retracement here followed by a higher high, then I have a potential trendline target on SPX in the 2885-2900 area, depending on the time taken to reach those trendlines. On SPX  this last retest could obviously fail on a very marginal higher high, but if not then the next target higher looks like those trendlines.

SPX 60min chart:
The 15min RSI 5 sell signal on SPX has now reached target but the RSI 14 sell signal is still open and I'm expecting to see at least some more downside even if this is just a retracement. The ideal rising wedge resistance trendlines on these SPX charts are both currently in the 2890 area and the wedge on the SPX 15min chart below is a lower degree wedge part of the larger wedge on the SPX hourly chart above. Stan has also identified this area as a fibonacci target area. We shall see.

SPX 15min chart:
We delayed the Trading Commodities (Setups and approaches) webinar that we were going to do an hour after the close last Wednesday to an hour after the close tomorrow. If you'd like to attend then you can register for that on our April Free Webinars. We are also doing our monthly free public Chart Chat on Sunday and you can register for that on the same page.

Tuesday, 26 March 2019

Backtest Or Retest?

The first move down on equities has delivered nicely, and at this point the time has come for the rally that is in progress at the moment. Now on the bigger picture this is an inflection point test of trend resistance, and the alternate inflection point outcomes are either a failure at resistance into another leg downwards, or a break and conversion of resistance back to support, opening another retest of the all time high.

On SPX resistance is at the weekly pivot at 2820, supported by the key short term trend support/resistance levels at the 5dma, currently at 2820 and the 50 hour MA, currently at 2825. We should either see failure in this area, or a break back up into the high retest. I discuss the options on this morning's premarket video. Since then the 60min buy signals on ES, NQ and RTY have all either made target or the possible near miss target.

Full Premarket Video from theartofchart.net - Updates on ES, NQ, RTY, DAX, ESTX50, SPX, NDX, RUT, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX, EURUSD, USDJPY, USDCAD, AUDUSD:
On SPX there is a concerningly (for bears) solid looking low setup yesterday. There is an open double bottom target at 2835, not yet reached, and a decent quality overall rising channel from 2722 was established at yesterday's low, which also respected an important open breakaway gap from 2784, which obviously remains to be filled on another leg down. The hourly RSI 14 sell signal has not yet reached the possible near miss target, and there are still daily RSI 14 and RSI 5 sell signals on the ES chart. SPX 60min chart:
On NDX the obvious next target is rising wedge support, currently in the 7205 area, and that has not been reached. The hourly RSI 14 sell signal has also not yet made the possible near miss target and if we were to see a rally high retest from here I'd be leaning strongly towards that being the second high of a double top. NDX 60min chart:
The setup that should concern bears most here however is on RUT/RTY. On RUT there is a very decent looking falling wedge forming that might well be a bull flag. The wedge is a perfect flag channel on RTY (RUT futures) so they are telling the same story. There is an obvious setup to retest the rally high here on RUT and if that happens then I'd expect similar retests on SPX and NDX, and perhaps higher. RUT 60min chart:
Cycles aren't favoring the all time high retest here yet, but my monthly middle band stat is favoring seeing that retest this year. SPX is not far from the all time high though and every marginal higher high increases the chances that we might see that sooner than expected. We shall see. I'm estimating the odds of this just being a backtest at 70/30 in favor on the overall setup, but with a solid 30% chance of a break up into that rally high retest. If we see the next leg down I have the next serious possible support levels in the 2760 and 2720 areas.

Stan and I are doing a webinar tomorrow on setups and approaches to trading commodities. If you'd like to attend, you can register for that on our March Free Webinars page.

Friday, 15 March 2019

So Here We Are Then

Last Friday I was saying that my preferred scenario on SPX would deliver a marginal new rally high to make the second high of a double top to then take SPX back into the 2600-50 area. We have seen that marginal higher high, the middle of this cycle high window is today, and the stats for next week lean significantly bearish. If everything keeps going to plan then SPX is about to reverse down here and this high may be the 2019 high, though I'm still wondering about a possible ATH retest after the next big low window in June.

There was a very nice setup for reversal across the board on indices this morning, but in my premarket video I was doubtful about those delivering anything today just because the stats for today are so historically bullish, and so it has turned out. Updates on five equity indices and seventeen other instruments on my premarket video from this morning.

As an aside, I was told a few weeks ago after posting one of videos these here that I tend to go pretty fast in these premarket recordings, and that's true, and that I should consider taking it a bit slower, which I won't, as it is fast for a good reason. I'm reviewing the salient trading setups on twenty two tickers in less than ten minutes every morning, and I don't like the videos to run over ten minutes because people are busy in the mornings. All the futures charts shown are also uploaded to the website for subscribers to review, and these videos are recorded for those subscribers rather than intended for general consumption. It's a compromise and, if I'm going too fast for you, please just use the pause button.

Full Premarket Video from theartofchart.net - Updates on ES, NQ, RTY, DAX, ESTX50, SPX, NDX, RUT, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX, EURUSD, USDJPY, USDCAD, AUDUSD:
There's now a high quality double top setup on SPX which on a sustained break back below 2722 would look for a target in the 2615 area. An encouraging possible hourly RSI 14 sell signal is brewing. I like a sustained reversal from this area.

SPX 60min chart:
On NDX the original rising wedge has expanded into a larger version of the same rising wedge and that has now delivered a slight bearish overthrow A classic bearish setup and another promising hourly RSI 14 sell signal is brewing. On NDX I also like a reversal from this area.

NDX 60min chart:
RUT has delivered a decent lower high. DAX has a solid double top setup and the ESTX50 setup is very similar to NDX, with the exception so far of the bearish overthrow. We might see marginal higher highs on all of these, but the topping setups look cooked and ready to deliver. Next week should be interesting.

Everyone have a great weekend. :-)

Tuesday, 12 March 2019

Back On The Three Day Rule

I was looking at the likely reversal back up on Friday morning and obviously we have seen that and ES/SPX have broken back strongly over the multiple resistance levels in the 2660-70 area, weekly and monthly pivots, daily middle band 5dma and 50 hour MA. So now what?

Well in the short term a retracement seems likely and in my premarket video this morning at theartofchart.net I was projecting an ideal path of a higher high (over 2799 ES Jun) setting up a possible 60min sell signal on ES. Ideally ES would then retrace back to the monthly pivot at 2765 ES (2760 SPX) before either breaking back down through that into lower lows, or (more likely) finding support and retesting the rally highs in what would probably be the second high of a double top setting up a larger retracement into the low 2600s.

Here's how that short term divergence looks on the ES Jun 60min chart:
On the SPX hourly chart there is now a possible RSI 5 sell signal brewing.

SPX 60min chart:
That monthly pivot support on SPX / ES is a decent match with the SPX 5dma, now at 2768 and particularly important because the close back above the 5dma yesterday after the more than 2% decline has put SPX back on the Three Day Rule. On a close back below the 5dma today (extreme long shot) or tomorrow (potentially doable), I'd expect to see a retest of the low at 2722 before a retest of the rally high. We shall see.

SPX daily 5dma chart:
One other thing I mentioned in premarket video today was that in the event that NDX retested the rally high before the expected retracement here, that would set up a decent quality double top on NDX and increase the chance that a more significant lower high was being made on SPX here. NDX has retested the rally high now so that's worth noting too. Nonetheless I still think that a retracement and then higher high here are more likely than a break down directly.

NDX 60min chart:
Either way, SPX is likely in the process of forming a high that should at least deliver a backtest of the low 2600s, and I'm expecting the downtrend for that move to get going within a few days.

Friday, 8 March 2019

Looking For This Retracement Low

Everything that I was looking at on Wednesday has delivered except that SPX has not quite yet reached the H&S target at 2720. The daily RSI 5/NYMO sell signal fixed and reached target, the hourly sell signals on SPX and RUT both made target, and while SPX might need another marginal lower low to reached that 2720 target, this is the right area to see this retracement low, and it could already be in. So what now?

Well there are two obvious options here assuming that the retracement low is being made in this area. I'd expect either option to be complete within two weeks and for a larger decline to follow.  My preferred option would be a retest of the rally high with a marginal higher high. My one reservation there is that the three highs resistance that I was looking at before the high was made never broke, with the current high at 2816.88 just 0.06 below the top of that resistance at 2816.94. That being the case there isn't much room for a higher high unless that resistance breaks.

The other option here is that an H&S is forming, and that a right shoulder will form here with an ideal right shoulder high in the monthly pivot area at 2760. Depending on the time taken to rally, that might well be a decent match with the 5dma, currently in the 2766 area, and the 50 hour MA, currently at 2776. Either option should yield a reversal pattern that would take SPX back into the 2600-50 area.

SPX 60min chart:
RUT has been leading the decline and may be leading on the rally as well. Worth noting that there are possible buy signals brewing on both RSI 14 and RSI 5, and that the current retracement low has established a decent quality rising channel that may be support on the next move up.

RUT 60min chart:
Everyone have a great weekend! :-)

Wednesday, 6 March 2019

Watching SPX Monthly Pivot

I was looking at the topping setup here before the open, among other things. Full premarket video below including a very nice reversal setup on GC.

Full Premarket Video from theartofchart.net - Updates on ES, NQ, RTY, DAX, ESTX50, SPX, NDX, RUT, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX, EURUSD, USDJPY, USDCAD & AUDUSD:
On SPX there is an H&S formed that has completed forming since I capped this chart, though it has not yet broken down. What I was talking about in the video was the possibility that the H&S would break down with a target in the 2720 area, reaching an inflection point just above the monthly pivot at 2760, and rejecting from it into a retest of the rally high. Alternatively SPX breaks though 2760, converts it to resistance, and then continues down to the H&S target in the 2720 area.

SPX 60min chart:
Similar setup on on ES except that the H&S has already broken down slightly. 

ES Mar 60min chart:
On the daily chart the full RSI 5 / NYMO sell signal should fix today until there is a strong rejection back up today. That would favor the 2720 target. I would also note that the 200dma is now at 2738.

SPX daily chart:
Stan and I did our free public Chart Chat on Sunday and if you missed that, the recording is posted on our March Free Webinars page.

Friday, 1 March 2019

Retest Interruptus

I was making the argument before the open this morning that equity indices were so close to obvious resistance on NQ, RTY, DAX and ESTX50, that ES might well deliver a lower high this morning and fail hard there. So far that has delivered though this morning's high might need a retest.

Premarket Video from theartofchart.net - Update on ES, NQ, RTY, DAX, ESTX50, SPX, NDX, RUT, CL, NG, GC, SI, HG, ZB, DX:
If this morning's high area holds, where might SPX be headed next? Well if a bull flag is forming here to set up a high retest before a larger retracement, then the obvious next target would be the 2760s, with some established support in the 2760 area and a possible flag support trendline in that area.

SPX 60min:
Could the retracement go further? Yes, I'm looking particularly at the H&S on RUT, with a target in the 1540 area on a break down. That could be a match with the ES/SPX target area though. Bigger picture the setups, particularly on DAX and ESTX50 are suggesting lower than these levels soon.

RUT 60min:
Stan and I are doing our monthly free public Chart Chat on Sunday, looking at the usual wide range of equity indices, forex, bonds, metals and commodities. If you'd like to attend you can register for that on our March Free Webinars page. Be there or be unaware! :-)

Wednesday, 27 February 2019

Topping Out ........ Probably

SPX and NDX reached the resistance areas that I was looking at and may be topping out there. the rising wedge support trendlines on SPX, NDX and RUT have all now broken down. So what now?

Well on SPX I have been watching three levels which are all currently in the same area. These are the SPX weekly pivot at 2784, the 50 hour MA now at 2787 and the 5dma now at 2790. What I was looking for this morning was a break down through these, which we saw, then a backtest into those as resistance which failed in that range. That we did not see, and I'm wondering whether we are going to see a high retest next to set up the second high of a small double top. SPX is still on a 60min RSI 14 sell signal with a possible daily RSI 5 sell signal brewing.

SPX 60min chart:
NDX has also found resistance so far in the range of the three rally highs late last year. Again I am wondering about a possible high retest from here. That would set up possible daily RSI 5 negative divergence and another possible small double top.

NDX 60min chart:
Of the three RUT was the only one to break the weekly pivot (1581) with any enthusiasm, and then reach a possible H&S neckline I'd been looking at in my charts for subscribers. An H&S right shoulder may well be forming there and, if so, that right shoulder would have an ideal right shoulder at the backtest of WP, though the equivalent target on RTY is a bit higher in the 1588 area. We may be forming that right shoulder now, and would likely only see the high retests on ES and NQ if that also breaks up into a rally high retest. RUT is also on an hourly RSI 14 sell signal and in this case weak RSI 14 and RSI 5 sell signals have already fixed, though a high retest could turn those into full signals.

RUT 60min chart:
Overall I'm looking for more retracement here, possibly after rally high retests, but my concern is that the timing cycles have this retracement low middle to end of next week, followed by a push up into the 20th March area. That's not a lot of time, and the more time is spent topping here then the more modest that retracement is likely to be. The more modest that retracement is, then the higher the chances that the March high will be the possible all time high retest that has been on my radar since SPX broke back over the monthly middle band at the end of January.

Stan and I are doing our monthly free public Chart Chat on Sunday, looking at the usual wide range of equity indices, forex, bonds, metals and commodities. If you'd like to attend you can register for that on our March Free Webinars page. Be there or be unaware! :-)