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Thursday 24 January 2019

Topping Out, Probably

SPX went up through both of the annual pivot and 50dma resistance levels and has come close to a test of declining resistance from the all time highs, now in the 2690 area. I was talking earlier this month about the vital importance of monthly closing resistance at the monthly middle band, now at 2664. In the event that there is a clear close in January back above it, then the odds would strongly favor a retest of the all time high before there was anything more than a marginal lower low on SPX. The last time there was a significant monthly closing break back over the middle band in a possible bear market without such an ATH retest coming next was over 60 years ago.

SPX monthly chart:
The initial rally patterns have broken down, except perhaps on DAX, and SPX/ES is now in an inflection point where it either breaks down at least into the high 2500s, or retests the rally highs, probably to make the second high of a double top. I talk about that in detail on the video below, recording at lunchtime today.

Full Intraday 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:
Short term support is at the 50 hour moving average, always a significant short term trend support/resistance level, now at 2630. If that converts to resistance then that opens the test of 2600 next. If SPX breaks up instead then a marginal new rally high would also deliver, at the moment, a possible test and fail at declining resistance from the all time high. If we haven't seen a break down by tomorrow lunchtime then I'll be leaning towards that high retest.

SPX 60min chart:
Stan and I are doing a free public webinar an hour after the close tonight looking at AMZN, AAPL, FB, GOOG, NFLX, TSLA and also the sectors ETS, IBB, IYR, XLE, XLF, XLK, XRT. If you'd like to attend you can register for that here.

Monday 14 January 2019

Bear Flags and SPX Annual Pivot

In the video below before the open this morning I looked first at the clear bear flag rally patterns developed on ES, NQ, RTY, DAX and ESTX50, then SPX, NDX and RUT. That's a lot of bear flags and while these don't always break down, they usually do and the odds favor that again here. None of these have broken down yet apart from a slight break on ES rising wedge support, and if we see confirmation with a break and conversion of the ES weekly pivot at 2572.50 to resistance today or tomorrow then I'd expect all of these bear flags to start breaking down with likely minimum targets at a retest of last month's low. 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 upside the SPX high last week was just under the 2019 annual pivot at 2598. I'd note that the February low last year was just a few handles below the 2018 annual pivot, so it's a good area for a rally high. We could still see a marginal higher high but I'm not expecting it to be broken by much. SPX daily chart:
On the SPX chart the bear flag pattern is a rising wedge and wedge support is now in the 2544 area. Watching a clear break there for downside break confirmation, slightly below the monthly pivot at 2551. SPX 15min chart:
We've introduced daily coverage of DAX and Stoxx 50 futures on a trial basis to assess interest in these and we might introduce Nikkei coverage later on the same basis. If you're interested the you can get a 30 day free trial to our non-options services at the bottom of our subscriptions page.

Friday 4 January 2019

So Far, So Good

Stan and I did an educational webinar at theartofchart.net yesterday after the close on trading in bear markets, and we were talking then about ES/SPX being at an inflection point where on a conversion of the ES weekly pivot at 2441 to resistance ES would likely head down directly into the low retest, but if decent support was found there ES should reject into a retest of the rally high and ideally head for a target in the 2550 area. You can see a recording on that webinar on our January Free Webinars page.

I was talking more about that in my premarket video this morning. Full Premarket Video from theartofchart.net - Update on ES, NQ, SPX, NDX, RUT, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX:
On ES the obvious next serious resistance is at the monthly pivot at 2545.75 and that is now getting close. I'd note that the SPX daily middle band is now in the 2537 area. If resistance is not found there then there is an alternate scenario with a target in the 2600 area which would be a match with the obvious trendline resistance on ES. ES Mar 60min chart:
First trendline resistance on SPX is now being tested. Obviously there is a possible fail area here but the alternate rising channel resistance is currently in the 2590 area if we see a sustained break above. SPX 15min chart:
On NDX the obvious wedge resistance is now in the 6450-60 area and has not yet been tested. Ideally we would see some retracement here and then that test on hourly negative divergence. NDX 15min chart:
The ideal rally high would be made on Monday or possibly Tuesday and I'm watching to see whether there is a daily close over the SPX daily middle band. That could open the higher targets, though a closing break above today might of course be a prelude to a rejection back below the band on Monday. Either way this should be a bear flag forming and on a break back below flag support, currently in the 2460 area, the obvious next target would be a retest of the 2018 low at 2346.58, with an attractive target not far below at rising support from the 2011 low, now in the 2300 area. Everyone have a great weekend. :-)