Decent Rally Setup

The ES IHS that I was speculating might form at the 1145 neckline yesterday morning has since formed, and has delivered a very nice looking short term bull reversal setup. It hasn't yet broken over the neckline, and bull setups are at much higher risk of failing in this strong bear trend, but it's looking pretty good, and if the neckline can be broken with conviction then the IHS target is 1177 ES:

I posted yesterday that silver had reached a natural reversal level and might well retrace. That's looking even better this morning and that would fit with an equities rally of course:

Bonds are very important at the moment, as they've been acting as a barometer of the level of risk aversion in the markets. When bonds rise then equities fall, and vice-versa. I was therefore very interested to see that an important support trendline on 30yr treasury futures (ZB) broke down overnight and is now retesting. ZB has been struggling in the 140 resistance area and we might well now see some retracement of the move up from 126:

I'm still skeptical. As I said, bull setups are at much higher risk of failing in a strong bull trend, and I was expecting to see a lower low on SPX before the next rally. If ES breaks up through 1145 and holds it though, then a rally should happen regardless. We'll have a decent idea at the open or shortly afterwards. On my SPX 15min chart the key resistance areas are at 1135 and at declining resistance from the recent high at 1143. Anything over is most likely a break up:

Last chart of the day is GDX, where I sold my longs yesterday. This is a complex picture with the backdrop being a large rising wedge from 2008 that broke down in February. Shorter term though a broadening formation, right-angled and descending, has formed since late last year with resistance just over 64. From here the pattern should either break up with a target at 77, though this is not a great performer for reaching upside targets, or reverse towards pattern support in the 50 area:

Overall the picture here looks guardedly bullish here, moving to strongly bullish (short term) on a conviction break above 1145 ES. If we see that then we should also see the retracements in silver and bonds that are suggested by the charts there.

I'm going on holiday in a week or so and will have to cut back my posting schedule while I'm away. I'm expecting to get a post out at the weekend for the next three weekends but any posting during the subsequent weeks is likely to be very thin. I'm already cutting back on the length of my posts this week as I have a lot of preparation work to do before I go.