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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.