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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:
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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. :-)