Leaning Short

SPX closed another day of riding top of the daily upper bollinger band on Friday. Moves like this can last a few days, and in another three days SPX could test the September high doing this without breaking the current rising channel. I'm expecting to see some retracement before that though, and when we do see some retracement the main target will be the daily middle bollinger band, currently in the 1430 area:

Looking at the 60min chart SPX has been respecting rising channel resistance on increasingly negative 60min RSI divergence. I'm expecting channel resistance to hold:

AAPL retraced back below the trigger level for the smaller double bottom there on Friday. This weakens the double-bottom and I'm a bit concerned about this in the context of a likely retracement on equity indices in the near future. However the overall setup still looks bullish and there is very strong support in the 500 area:

On other markets there was a decent bounce on EURUSD after the declining resistance break on Friday, and I think EURUSD is now in a bottoming process. We could however see a lower low to touch main rising support from the 2012 low in the 1.2965 area before a stronger reversal upwards:

On CL there are now two rising support trendlines, but the failure to make a higher high since the last bounce has me wondering whether we will soon see a test of the lower rising support trendline in the 90.4 area:

I've been having a careful look at TLT this morning, and that looks due a short term bounce here with a test of the September low and the daily lower bollinger band. On the bigger picture however the last few days has seen the first serious and sustained break below the 200 DMA since May 2011. This is a bearish development, and on a conviction break below 117 the next big support level is the possible H&S neckline at 107-8, with some support in the 112.5 area on the way. If we see a bounce then resistance is at the 200 DMA in the 121.5 area, with the daily middle bollinger band just above. That would look like a decent short entry if we see it:

For the short term I am expecting a decent retracement on ES and SPX in the near future. When will that be? Hard to say, but the signal should be a clear break below the 50 hour moving average on the ES chart. That's been holding overnight so far, but as and when we see a clear break below it that should signal that the short term trend has changed to down:

For anyone wanting some additional reading and a nice looking long play on KOL my weekend MarketShadows post is here.