Riding The Band Down

The bulls made another brave attempt to deliver a bounce yesterday, and failed badly again. I have channel resistance at 1334 SPX today and a break above might well be a bull trap, as both of the last two breaks were. Here's the channel on the SPX 15min chart:

The closer that SPX gets to the twin pattern target 1292 area, the less reason there is to think that there will be a bounce of any significance before that target is reached. The H&S neckline was retested very thoroughly, and the option of forming a horizontal H&S at 1340 has been eliminated. The next decent prospect for a reversal area may well be at 1292. Here are the double-top and H&S again on the SPX 60min chart:

On the daily chart you can see that SPX has been hugging the lower bollinger band on the way down. This can last a while. A conviction close below the band is generally a sign that a reversal is close, but we haven't seen that yet:

I posted the german Dax chart yesterday noting that rising support from October had been pinocchioed but not yet broken. Yesterday saw a definite break and this does strongly suggest a further move down, though we might yet see a bounce to retest broken support:

I've posted the possible H&S forming on EEM quite a few times since October. I posted it last week saying that rising channel support from late 2008 was next support and that has now broken, though as this is a weekly chart it might yet recover to close the week back above support as it did last October. If it doesn't then the next major support level on EEM is at the H&S neckline in the 34 area. At that stage this huge H&S would then obviously have completed forming:

Even more than the Dax, the big news yesterday however was that USD reached the 81.50 area, and that this possible IHS that I have been posting since January is now a fully formed IHS testing the neckline. A close above the neckline will trigger an IHS target at 91.50. That could make the rest of the year extremely interesting:

No crumb of comfort for the bulls today other than the observation that nothing goes up or down entirely in a straight line. I have no bullish reversal setup this morning to be demolished later today. We might see a bounce nonetheless of course, but increasingly I'm thinking that the next big bounce may well be at the test of the October high in the 1292 SPX area. For any of you who missed last night's post on gold and silver the link to that is here.