The Last Trump ...... Speech in February

Intense day today and I didn't manage to get a post out in RTH through a combination of a series of technical issues, lost work that needed to be repeated, and a lifelong love of quality pancakes. I'm doing a quick pre-speech post now as it will likely save some time on what is likely to be a very busy (and sadly pancake free) day tomorrow. 

I won't show any SPX charts today but I would note that a daily RSI 5 sell signal fixed on SPX today. This uptrend is fragile and while I'm still looking for a slightly higher high here a bad reaction to the speech could break the important support that held on SPX and RUT particularly today, and break the bull setups I'm showing on the ES and NQ charts below, and trigger the bear scenario that I'm looking at on the TF chart. 

The charts below are the ones I did earlier this evening for subscribers at theartofchart.net. 

On the ES chart the rising channel is looking good and there is a matching channel on SPX (shown further down on a twitter screencap). Channel resistance in the 2376 area not yet reached and obviously the speech being made now could break the channel in either direction.  Mar 60min chart: 

NQ is now back over the weekly pivot and retesting the previous high so the Jack (in The Box) Flag pattern target has been reached. NQ Mar 60min chart: 

TF reversing back up from a higher low at the moment. TF Mar 60min chart: 

Just to finish off the post and further elaborate my thinking today I have taken four screen caps below from the private twitter feed for subscribers at theartofchart.net today. 

I'm partially posting these because my persistent troll / digital stalker, who has been haunting me for a couple of years now I think, even going to the extreme length of taking out a paid subscription to theartofchart.net for a month to bug us there, has said some harsh things on my public twitter about my non-publicly available performance at this private feed. I didn't bother to argue with him about that, because there isn't ever much point arguing with a troll, but just to set the record straight this is almost everything, and everything pertinent, that I said about ES on that feed today.  Judge for yourself about whether I am as hopelessly out of my depth looking at ES intraday tape as my troll was alleging.  Obviously in each capture the earlier comments are lower. 

Twitter Capture 1:

Twitter Capture 2: 

Twitter Capture 3: 

Twitter Capture 4: 

Some days are more classical chart friendly than others on ES, so not every day is like today, but Stan contributes too and in my view we do just fine, on what is in any case just a bonus support mechanism for our main subscriber services, rather than a standalone service that we charge for. 

Tonight's speech is a major wild card and tomorrow is the first day of a new month, which traditionally leans bullish, so I'm not making any assumptions about the next day. 

Limping Higher

I was looking at SPX doing my weekend charts on Saturday and a new high seemed likely and we saw that this morning. That's great and decent looking possible daily sell signals are now brewing on both the RSI 14 and RSI 5. Ideally I'd like to see SPX go a bit higher to hit a trendline that I have above in the 2375/6 area, and Stan has a target slightly high at 2381, but I'm wondering whether it's going to make it. It may be a slow road to get there if we do, and the 5min RSI 14 sell signal that has fixed isn't encouraging for seeing that today. SPX 60min chart:

Possible RSI 14 and RSI 5 sell signals are now brewing on the daily chart. Support is at the daily upper keltner band at 2357. SPX daily chart:

ES hasn't made a new ATH yet in regular trading hours (RTH), though it has come close. ES Mar 60min (pre-market) chart:

NQ hasn't made a new ATH yet and might not. Yesterday when Stan and I were doing our Big Five update at theartofchart.net, we were seeing some unfinished business above but some of that has delivered this morning. We were looking for a high retest on AAPL and a marginal new high and AAPL has come within 0.05 of that test today. We were looking for a marginal new ATH on FB and that has delivered this morning. Those were the big ticket items, though a counter-trend rally also looks likely on TSLA, and it would be neater if the AMZN high was at one of the two possible resistance trendlines in the 860s. NQ Mar 60min (pre-market) chart:

TF has been the strongest so far today and has established itself over 1400. That suggests a full retest of the ATH is coming, though looking at the tape over the last hour or two, very possibly not today. TF Mar 60min (pre-market) chart:

Today and tomorrow are cycle trend days, which means that there are 70% odds that either buyers or sellers will dominate the day. If that's delivering today, and it's hard to tell so far, then the buyers would seem to have the edge.

TGIF

Very nice AM reversal yesterday morning as expected though SPX didn't manage a full retest of the ATH before a hard reversal overnight. SPX has managed a marginal break of yesterday's low at the open this morning and has so far filled about half of the opening gap from 2363.81. If that gap fills then I'd expect a retest of the ATH at 2368.26, though that might well be the second high of a small double top, looking at the both RSI 14 and RSI 5 sell signals that have now fixed on the hourly chart. If the gap doesn't fill then immediate support is at the open gap from Monday morning at 2351.16, and a fill of that gap might well open up a test of the current price floor in the 2339 area. SPX 60min chart:

SPX has now failed to hit the daily upper band for two consecutive days. That means that the upper band ride is over and unlikely to resume. That puts SPX in a likely short term topping process before a likely retest of the daily middle band in coming weeks and that is now in the 2319 area. That is rising of course so the longer that retest takes then the higher that target will be. SPX daily chart:

On ES there a possible H&S forming here that would have a target at established support in the 2331.5 area. If the SPX opening gap fills then that's very likely a bust but if it doesn't fill that's in play here, and supported by the sell signals on the hourly chart. ES Mar 60min chart:

NQ has a very strong target at rising wedge support in the 5280 area. That wasn't missed by a lot at the overnight low and looks like unfinished business below. NQ Mar 60min (pre-market) chart:

TF formed and broke down from an H&S & has then rallied hard from the break. On a break back over 1400 I'd be looking for a full retest of the all time high. TF Mar 60min (pre-market) chart:

I'm really not feeling well today and am very glad that today is Friday. If you missed last night's free educational webinar and would like to see it you can see that on this page here. Everyone have a great weekend :-)

Some Support Breaks Here

A new ATH at the open this morning but under the hood there were some telling signs of short term weakness both yesterday and in the subsequent move this morning. Yesterday there were some minor trendline support breaks, on the daily chart SPX failed to test the daily upper band, and some sell signals fixed on the SPX hourly chart. When I was doing this chart though I was looking at key short term support at the perfect rising channel from February 8th at 2360.5, and that has now broken, putting SPX in a likely short term topping process, though Stan and I don't think that the swing high is in yet. SPX 60min chart:

SPX came off the daily upper band ride yesterday. This needs a confirming second day without a test of the daily upper band, currently at 2377 and rising at about seven handles per day. If the band ride is over then SPX is likely in a topping process that should resolve into a test of the daily middle band, currently at 2316 but also rising of course. SPX daily chart:

There is a decent looking little double-top here on ES and on a break below 2355 the alternate targets for this asymmetric double top at 2345 or 2342.25. That could deliver a test of the weekly pivot at 2337.75. This could fail in a Jack In The Box continuation setup though and as Stan is treating this as a flat with the next downside target in the 2352 area, there is a very significant risk of a test of the 2352 area and a sharp reversal from there back up to retest 2367.75. ES Mar 60min (pre-market) chart:

NQ has broken down from the double top and made the double top target at 5315/6. The 60min sell signal there has made target and I'd also note that the first of our Big Five components to break support hard is TSLA gapping down through important trendline support this morning. More needed on NQ but that's a signal that the wind is starting to change. NQ Mar 60min (pre-market) chart:

TF has tested the possible target at 1386 that I was looking at in the pre-market. That is an established support area and possible H&S neckline that I'm watching with interest. TF Mar 60min (pre-market) chart:

The day is still young but the bears have already done enough damage today to suggest that the trend wind might be starting to change. The swing high most likely isn't made on SPX yet though and SPX may be retesting this morning's high before long. I'm watching to see whether the bears can deliver a decent red candle today. Stan's 2352 flat target is suggesting that they may not manage that today, but the action so far today considerably improves the odds that they'll manage a larger reversal soon.

Stan and I are doing two free webinars this week at theartofchart.net and did the first one last night on the Big Five - AAPL, AMZN, FB, NFLX and TSLA. The recording is posted on this page here. The second free webinar this week is an hour after the close tonight and is a second webinar on 'Technical Patterns You Can Profit From' following on from the first one in January. As always the TA will be world-class and the subject matter will be interesting so if you'd like to see that you can register it on this page here.

Might Retrace A Bit Here

The channel resistance break at the open yesterday was a significant break, and there's no short term reason to think that we are making a sizeable turn here. There is quite a lot of short term negative divergence here though and that might deliver a modest retracement. Double trendline support is currently in the 2356/7 area and if SPX can break below there is a possible gap fill target at 2351.16 or we could see another test of the current price floor in the 2340 area, a strong match with the ES weekly pivot at 2337.75. SPX 60min chart:

If SPX is still on a daily upper band ride then the upper band is currently at 2370 and we should see at least a close test of that today. That's a decent match with short term rising channel resistance on SPX and one of the possible longer term resistance trendlines that I drew in on the hourly chart. SPX daily chart:

Looking at ES there is still an open 60min sell signal on there from last night though I was doubtful about the double top setup when I did the chart this morning, and the sideways chop so far today means that I'm disregarding 2347 as a target. That doesn't mean ES can't retrace some more though and the short term support trendline break overnight was a strong support trendline break. At the time of writing this action looks like some kind of bull flag forming and I like Stan's 2351 target if we are to see any more weakness. ES Mar 60min (pre-market) chart:

At the time I did this chart this morning I noted that NQ had not broken the short term support trendline and it still hasn't broken it. That's currently at 2338 and without that break there is just the open 60min sell signal on the short side, which isn't to be relied upon in an overall uptrend as strong as this. We may see a weekly pivot test if that support trendline breaks. In the absence of that break the short term trend is still up. NQ Mar 60min (pre-market) chart:

TF broke short term support overnight and isn't far from a test of the weekly pivot at 1396.30. We may see that test today. TF Mar 60min (pre-market) chart:

With the channel breaking up on SPX yesterday there's no longer an obvious reason to see an imminent high here, though this uptrend is a strong terminal move that could top out at any time. Like a trend day though, while it lasts negative divergences and cycles don't mean a lot and the only strong reference point here is the daily upper band ride. A failure over two consecutive days to test the daily upper band, now at 2370, ends the band ride and opens the middle band, currently at 2312/3, as a target. A confirmed daily close below the middle band likely ends the uptrend.  In the short term the structure is strongly suggesting at least one more higher high, after a possible modest retracement here.

Stan and I are doing two free webinars this week at theartofchart.net an hour after the closes today and tomorrow. The first is the Big Five webinar today (rescheduled from last week) looking at AAPL, AMZN, FB, NFLX and TSLA. We've been doing some really nice work on these the last few months and these are all looking very toppy here, so that should be interesting. The second tomorrow is a second webinar on 'Technical Patterns You Can Profit From' following on from the first one in January. As always the TA will be world-class and the subject matter will be interesting so if you'd like to see either of those you can register for one or both on this page here.

SPX Gaps Through Channel Resistance

SPX didn't quite make the ATH retest I wanted on Friday and delivered it this morning with a gap through channel resistance. Channels don't overthrow so that is a clear resistance break and opens higher targets.  SPX 60min chart:

On the daily chart the retracement on NYMO has opened up some some on the falling channel there and I have a possible resistance trendline in the 2380 area that I'll be watching if SPX pushes higher. Bottom line here is that SPX is on day 8 of a daily upper band ride and there's no obvious reason right now to think that is ending here. SPX daily chart:

The ES support trendline I was looking at this morning has held and I have a possible matching resistance trendline currently in the 2374/5 area. ES Mar 60min chart:

NQ wedge resistance is now in the 5359 area. A possible 60min sell signal is now brewing. NQ Mar 60min chart:

TF has now done the full ATH retest and has made a marginal new ATH. Solid trendline resistance is now in the 1417 area. TF Mar 60min chart:

Looking at the Big Five tickers over the weekend there were three obvious targets above that looked as though they needed to be hit. AAPL needed an ATH retest, done this morning, there was a short term IHS on TSLA that made target this morning, and a triangle is forming on FB that likely delivers an ATH retest there. FB has barely moved this morning so that still looks like unfinished business there, though there are 30% odds that that breaks down of course.

My working assumption at the time of writing is that ES/SPX is trend up today. No sign of weakness so far. If that's right then next decent trendline resistance is in the 2375-80 area and that may be tested today.

A Pearl Cast Before A Swine

I've blocked my latest twitter troll, though apart from the one with very poor english a few weeks ago, I strongly suspect that I've had the same troll on twitter and my blog for a few months now. If I'm right then he has a London IP address and seems to have a lot of time on his hands. Some of you may have been wondering about the posted trade I mentioned to him, as it's rare for me to post these, but I was a bit irritated at the 2015 high with being called a permabear for calling a high there, and with clueless pundits telling me that big retracements wouldn't be allowed by the Fed, so on Tuesday 26th May 2015 I wrote a post helpfully entitled 'On The Road to 1820', with SPX at 2126 at the time, and mentioned that I was short from 2132 ES and was planning to hold it for a 300 handle decline. I cashed that short at 1812 on the morning of Wednesday 20th January 2016 and reviewed it at the end of my post that day called 'The Trend Is Strong In This One'. It was a sweet trade and I considered that my point had been made. Needless to say my troll wasn't impressed, but then it's not possible to impress a troll. On to the markets.

On SPX I still like a retest of the high or marginal new high to make the second high of a small double top to end this move. If we are going to see that we should see that today. A break below yesterday's low at 2338.87 means that retest becomes considerably less likely. If we see a marginal new high today I'd be looking for a likely failure under 2355/6 SPX. SPX 60min chart:

On the daily chart yesterday was the first (albeit only slightly) red candle in a while with NYMO turned more firmly down. If we see a high retest today that would not set up any usable negative divergence on RSI, though it would most likely deliver hourly sell signals of course. SPX daily chart:

On ES we are seeing the rally that I was looking for this morning and I have a small double bottom target in the 2346 area that ES should deliver if it can sustain trade over important resistance at 2343. The falling wedge on RSI is currently testing wedge resistance. ES Mar 60min (pre-market) chart:

On NQ the falling wedge on RSI has already broken up and NQ has come close to an ATH retest this morning. I mentioned yesterday that I was looking for full ATH retests on AMZN and TSLA to seal the high. I'm doubtful about seeing that on TSLA now as TSLA has broken rising megaphone support for this move, but AMZN has just made that new ATH, and I'm looking for a hard fail from a marginal new high there. NQ Mar 60min (pre-market) chart:

TF has also broken the RSI falling wedge and has rallied somewhat, though if a small H&S is forming there then this rally may have a firm cap in the 1400 retest area. TF Mar 60min (pre-market) chart:

If we are going to see the ATH retest on SPX that should be today. Price is still thinking about it and the rest of the day could go either way from here, depending on whether 2343 ES can be converted back to support. We'll see. The RTH markets are closed on Monday so my next post will be on Tuesday morning. Everyone have a great holiday weekend :-)

PS. Stan and I are doing two free webinars next week at theartofchart.net an hour after the closes on Wednesday and Thursday. The first is the Big Five webinar on Wednesday (rescheduled from yesterday) looking at AAPL, AMZN, FB, NFLX & TSLA. We've been doing some really nice work on these the last few months and these are all likely topping out here short term for a strong retracement, so that should be interesting. The second on Thursday is a second webinar on 'Technical Patterns You Can Profit From' following on from the first one in January. As always the TA will be world-class and the subject matter will be interesting so if you'd like to see either of those you can register for one or both on this page here.

Likely Capitulation High Yesterday

The short term rising wedge on SPX either overthrew yesterday or widened into a small rising channel, but the big news on the hourly chart was that the high established a perfect overall rising channel for this move from early December. The AM high today was a slight break below short term rising channel support and on a conviction break below the next obvious target would be larger rising channel support, currently in the 2285 area. I do like a retest and marginal new high from here, that would set up possible 60min sell signals and get SPX a little closer to my 100% fib extension target at 2356/7. It would also give AMZN and TSLA a chance to do the ATH retests that may be required for a swing high here on NDX/NQ. SPX 60min chart:

Negative divergence was also lost on the daily RSI 14 yesterday but I'd note that the falling channel on NYMO survived the day, with increased negative divergence there. With the RSI this high though, divergence isn't really needed for at least a short term reversal. SPX daily chart:

ES expanded from a short term rising wedge into a larger rising megaphone yesterday. Rising megaphone support was broken slightly at the low this morning, but for a real signal of weakness we still need to see a break of yesterday's low at 2331. ES Mar 60min (pre-RTH) chart:

NQ is back in the rising wedge at the low this morning and may have topped, but as I said, I am wondering whether AMZN & TSLA may need full ATH retests before the swing high is in. NQ Mar 60min (pre-RTH) chart:

TF broadened into an even better overall rising megaphone yesterday and barring a possible retest the high there is likely in. Short term rising megaphone support broke at the lows this morning. TF Mar 60min (pre-RTH) chart:

One thing that does worry me slightly about this high is that at every significant high or low in the last few years I've been accused of being a permabear (at highs) or a permabull (at lows), by those with a bad case of recency bias, and I haven't had anyone say that to me here yet. I'm hoping that's not a prerequisite for a turn. I have attracted a couple of trolls in recent days though as the turn has continued to not arrive and perhaps that is enough.

It may be rose-tinted glasses looking back but I seem to recall trolls being more intelligent and better educated a few years ago. One thing that never changes though is the attitude, and the assumption that whoever they are addressing is human slime. That's natural enough though, it's well known that a thief assumes that everyone else is a thief, a liar assumes that everyone else lies, cheating spouses are famously suspicious of their own spouses, and sociopaths assume that everyone else just pretends to be concerned for the welfare of others. When these damaged individuals look at others they just see a reflection of themselves. That said, it doesn't make them any more pleasant to interact with. I'll be glad when the turn is in & they vanish back under their rocks.

Highs Can Take A While

Another new all time high this morning and SPX is still on a daily upper band ride. That could end at any time but we're going to need to see some evidence before having any confidence in a turn here. This move up from the last low is in a decent little rising wedge and obviously that rising wedge support needs to break, but the key level that needs to break is yesterday's low at 2322.17. A break below would be a significant sign of weakness and the short term high (at least) would likely then be in. There is a lot of negative divergence on the hourly chart and the rising wedge on price and rising channel on the RSI 14 are firmly leaning bearish. SPX 60min chart:

On the daily chart SPX is likely overthrowing wedge resistance and confirmation of a likely turn would come with a daily close back under wedge resistance, currently in the 2318 area. If SPX does manage to continue higher there is a 100% fib extension target in the 2357 area that I am watching. SPX daily chart:

On ES the short term pattern is a very decent looking rising wedge with wedge support currently in the 2327.50 area. ES Mar 60min chart:

On NQ the overnight high was at the possible rising wedge resistance trendline that I was looking at yesterday morning in my premarket video (posted on twitter at the time). Short term rising megaphone support is now in the 5258 area, and a break below would open up a test of rising wedge support, currently in the 5207 area. NQ Mar 60min chart:

On TF the overall pattern is a very decent rising megaphone with resistance in the 1402 area. There is already a very decent looking double top setup here that on a sustained break below 1383.65 would look for the 1367.50 area. TF Mar 60min chart:

Overall this is a really nice looking topping setup and there's nothing here so far to strongly suggest that that is a break up. Could it nonetheless be a break up? Yes, there are no sure things in the market and precious few in the universe at large. Nonetheless the odds favor a fail here.

I have heard the comment that hardly any other analysts are looking for a high here, but I don't tend to pay much attention to that, and haven't in the past noticed much correlation between the number of people expecting a market outcome and the odds of that happening. A really high level of unanimity is a warning sign in my view, and the biggest analyst and trader train wreck in recent years had almost everyone on the wrong side. I wrote a post looking at that in May 2014 and that's worth a read if you are a believer in the power of the majority view. You can see that here, As far as I was aware there were only three analysts worldwide who called that correctly, I can't recall who the other two were. The market will turn here or it won't, there's only one way to find out for sure and that is to wait and see. In the meantime the odds favor the downside here, but given the strength of this move I'm waiting to see some evidence of weakness to signal that the turn is in.

High Window - Final Day

The high window has been extended somewhat by the strength of this move, but today is the last day of the window. It could just about run into tomorrow but at the least the high should be very close. Short term this looks like a rising wedge on a lot of negative divergence. A break below today's low at 2322.17 should confirm a high. SPX 60min chart:

If SPX does run a bit higher I do have an eye on a 100% fib extension target at 2357. I also have targets a little higher on NQ and AMZN so I'm wondering about that possibility. SPX daily chart:

This all looks like a bearish overthrow and I've not seen anything yet that has me concerned about this being more than an irritatingly extended high. If this uptrend extends into the close on Thursday that might well change.

Math vs Myth

SPX retested the high and has made a new all time high with enough confidence that I am looking seriously at the next trendline target in the 2318 area. This is the resistance trendline on the rising wedge from the start of January. SPX 60min chart:

What makes this a particularly compelling target is that it is a close match with wedge resistance on the much larger rising wedge from the February 2016 low. SPX daily chart:

If reached the wedge might overthrow that level slightly, but I'd expect ES rising channel resistance in the 2318 area (about 2321/2 SPX area) to be a hard ceiling that shouldn't be broken, though it may need to be tested. A 60min sell signal fixed overnight. ES Mar 60min chart:

NQ looks cooked here. Not expecting much more upside. A 60min sell signal has fixed. NQ Mar 60min chart: 

TF is trying to retest the ATH and may make it yet. Regardless, a 60min sell signal is now brewing there. TF Mar 60min chart: 

Ideally SPX/ES hit these targets at the highs today and we see a gap down on Monday to start the expected correction. Everything is in place for that now and it should be starting imminently. We'll see if it does. As ever I'd note that these forecasts are made with math rather than magic and that if there is such a thing as a certainty in trading, I have yet to see it. Nonetheless math tends to do ok. Next post is on Wednesday morning & everyone have a great weekend :-)