SPX put in a sixth day riding the daily lower band yesterday, with a touch of the lower band at the low and a hit of falling megaphone resistance at the high. SPX daily chart:
At the high we saw the test I was expecting of falling megaphone resistance, and that overthrew slightly at the high to test the 50 hour MA. After that the day was mostly downhill. So what does this mean?Well it means that until we see a break up, we need to assume that the downtrend is ongoing, and that SPX is starting a move towards megaphone support, which is now close to the double-top target in the 1937 area. Furthermore the overthrow means that whichever megaphone trendline we test next, either the upper today, or the lower soon, is likely to break at that test. That's something to bear in mind, as the target for this megaphone on a break down would currently be in the 1860 area, well below main double top support at 1904. SPX 60min chart:
Dow did essentially the same as SPX yesterday, same megaphone, same overthrow. Whichever way this goes today Dow and SPX are currently in lockstep. Dow 60min chart:
I've been posting this long term USD chart for a couple of years now, talking about the possibility that USD might test the main declining resistance trendline from the 1985 high, and perhaps break up through it, and that trendline was finally tested yesterday. That is one of two strong resistance levels on USD here, the other is in the 88.50 to 90 area if USD doesn't reverse here. USD monthly chart:
I ran all my equity charts yesterday night and the highs retest scenario that I was outlining yesterday morning still has a shot here, but the benefit of the doubt has to be given to the bear side until we see a break up from the falling megaphone and 50 hour MA on SPX. Until we see that break, any rips should still be sold.
No comments:
Post a Comment