Lower Lows Overnight

The bounce yesterday was at an obvious level for the short term bull case, but lower lows on ES and EURUSD overnight are less encouraging. There's not much to work with on ES at the moment in terms of trendlines but I did come up with a short term rising channel that has just broken as I've been writing. There is some support at 1260.5 that is holding so far but if that breaks then a move down to 1244 is on the cards:

On the SPX chart negative divergence on NYMO has lasted into a second day. If we start to retrace seriously then the obvious target is the middle bollinger band, currently in the 1246 area and rising:

I posted a Dow chart on twitter yesterday that supports the case for retracement here. You can see that Dow has retested the key support turned resistance trendline from last year:

On EURUSD a marginal new low has been made overnight. Strong support at 1.285 isn't broken yet and this is a strong reversal setup IF EURUSD bounces strongly here. If not then I have next support in the 1.27-1.275 area, but this would be a major support break and it might well go lower. I posted a possible channel a couple of weeks ago suggesting that we might see a move to the 2010 low in the 1.19 area and that's still something to bear in mind:

Looking at the intermarket setups I'm leaning cautiously short on bonds here. 10yr Treasuries have made what might well be a double-top just over the 2008 high, and the double-top would indicate back to rising support from 2007 in the 122 area. That would look bullish for equities if that plays out:

Most of the usual bullish lead indicators are trailing here however. Copper has formed a triangle from the low that looks more likely to break down than up:

The CCI index is obviously also at an interesting level here. Short term declining resistance has broken,but the broken support trendline from 2007 is being retested:

Overall I'm not really feeling it in either direction today. The break up through resistance on Monday was bullish but everything since so far feels bearish. There's not much in the way of trendlines or patterns to work with here so effectively we're left with support and resistance levels. Main support here is at SPX 1267 and if that holds then we could see a run to 1292. If 1267 breaks in real time trading hours then the chances are that we've made a short term top and will retrace.