Hold Or Fold

Obviously the rejection candle opportunity for bears yesterday was a one day only thing, and that day has passed. What we are seeing today is a decent little retracement that has a chance to grow into a larger backtest of the daily middle band. I'm talking about that on the video below: Intraday Video from theartofchart.net - Update on ES, NQ and TF:

The specific setup on SPX here is that this is firstly a test of a series of support levels close together. The first double support level is yesterday's low at 2753.78 and rising support from the lows and both are now broken. The other support level is the open, possible breakaway, gap from Friday's close at 2747.30. If that gap fills then the path is open to go and backtest weekly pivot at 2731, and maybe the daily middle band now at 2717. There is a decent looking H&S that on a break down would have a target in the 2724 area.

If support holds then SPX heads straight back to the highs. If the support break was to happen tonight, with an opening gap that didn't fill, then that would be a strong break and candidate island top for what might well then be a completed wave B of an ABC retracement. We'll see what happens overnight. SPX 15min chart:

Breaking Over A Daily Middle Band - Day Two

SPX and RUT both broke with confidence over their daily middle bands on Friday and such a break is a two day process. Bears get a potential 'Get Out Of Jail Free' card the next day if they can deliver a rejection candle that closes back below the middle band, and bulls need to deliver a second close over the middle band to confirm the break up. With SPX at 2773 at the time of writing and the middle band at 2721 and, with an hour of the trading day remaining, I am fairly confident that there is going to be no rejection candle today. This opens higher targets including possible all time high retests on both SPX and RUT. NDX is already close to an ATH retest, which now looks likely. Intraday Video from theartofchart.net - Update on ES, NQ and TF:

Rejection candles are pretty common, and the bears put in a decent start to one at the low this morning, but that was bought and at this stage of the day they are most unlikely to recover. Rejections candles are a limited time offer and need to be delivered the next trading day, so at the close tonight the daily middle band is a confirmed support level. SPX daily chart:

What happens if we see an all time high retest? Well that might well be the second high of a double top, but that will be easier to call on the structure when we see the retest.

Price Is King

Since I started posting on YouTube a few weeks ago we have doubled subscribers on our channel there to slightly under 500. I have calculated that if we can continue doubling subscribers every two months for the next three years then we can overtake the current biggest YouTube star, currently at about 80 million subscribers I think. I'm certain PewDiePie is watching our relentless march towards YouTube greatness with great concern. :-)

On the video below I'm looking at the option that SPX breaks over daily middle band at the close today, something that is now looking likely. That would make a retest of the recent high at 2754.42 likely in my view, and unless we were to then see a rejection candle below the daily middle band on Monday, then we might well see continuation higher. That would suck but price makes these decisions, not analysts. Intraday Video from theartofchart.net - Update on ES, NQ and TF:

The daily middle band has been tested exhaustively over recent days and I was saying in one of the free webinars we did last night (recordings posted on our February Free Webinars page) that I would prefer not to see another test today, as if price keeps knocking on a door long enough, it tends to open. The level, now at 2725/6 has been tested again today, and currently it appears to be breaking, though there can be no clear break until the RTH session has closed. SPX daily chart:

Everyone have a great weekend! :-)

Still Testing SPX Middle Band Resistance

I try to post a full video once a week so I'm posting one today. If you're just interested in the equity indices I cover those at the start of the video. Stan and I are doing two free webinars tonight, the first is on trade execution 30 minutes after the RTH close, and the second is on the big five stocks and sector ETFs an hour after the close. If you'd like to see either or both you can register for those on our February Free Webinars Page. Full Intraday Video from theartofchart.net - Update on ES, NQ and TF ..... and CL, NG, HG, GC, ZB, KC, SB, CC, ZW, DX, EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD and NZDUSD:

SPX has rallied back to test the daily middle band again today, and rejected there again so far. As long as that remains the case then the likely next leg down has started, though confirmation of that only comes with the break and conversion of 2700 to resistance, which we are still waiting for. If SPX should break and convert the daily middle band then we would likely see the rally high retest that we didn't see yesterday, and bears would then need to deliver a rejection candle back below the middle band tomorrow. We shall see :-) SPX 60min chart:

We Will All Go Together When We Go

I remember seeing the very talented satirist Tom Lehrer on his last world tour in the 1980s, 'The Poisoning Pigeons In The Park' tour. Today's title is a small homage to one of my favorites in his repertoire, as well as a note that as and when equities are ready for the next leg down, all the main equity indices, and very possibly oil, are likely to participate. If you'd like to see the title song for this post you can see that here.

When that be? As soon as we see a break and conversion of the ES weekly pivot at 2703/4. I'm leaning towards to seeing a retest of Friday's high before we see that happen. Intraday Video from theartofchart.net - Update on ES, NQ and TF:

All three of SPX, NDX and RUT are showing remarkably similar pattern structures from the low and all three have broken down from the rising wedges that I was looking at on Friday. These should all now be in the topping process before the next leg down. SPX 60min chart:

Tomorrow is a cycle trend day so if a high retest can be managed today, then we may see the decline start today. In the meantime I'm wondering about possible bullish triangles forming here on equity indices, and possibly CL.

Testing SPX Middle Band Resistance

I have a question for my beloved readers today and I'm hoping one of you has a good answer. I've teamed up with an options expert friend to run a directional options portfolio based main on futures options for the last three months, and we've been recording the (very impressive so far) trades and results on a spreadsheet. We'd like to move this onto a professional web based alternative that we can publish from. The setup needs to work with futures options, auto-update the options prices, and not be restricted to basic options strategies etc. Do any of you know a good way to do this? The winning reply gets three months free membership if we later launch this as a paid service, which is where this is probably heading.

Onto the equity indices. I was mentioning yesterday that the daily middle band on SPX would be an ideal target for this rally and that has been tested on both SPX and ES this morning. Some rejection there so far and it's possible that the rally high is in, though I'm sceptical about seeing a lot of downside in what remains of today, on an opex Friday, going into a three day weekend, so we'll see. Intraday Video from theartofchart.net - Update on ES, NQ and TF:

Here's the daily middle band test on SPX. Possible hourly RSI 5 sell signals are brewing on both SPX and RUT and one has fixed on NDX. SPX daily chart:

Everyone have a great holiday weekend.

Into The Likely Rally High Zone

A couple of announcements today. Firstly tonight's webinar at theartofchart.net has been delayed a week due to an unavoidable conflict, and will now be held on the same night as our Big Five & Sectors webinar on Thursday next week. You can register for either or both on our February Free Webinars page.

The second announcement is that Stan and I are finally starting serious work on writing a book on TA and trading futures. We have an outline and a publisher and will be trying to finish that this year, so watch this space :-)

The hourly RSI 14 buy signals on NDX and RUT have reached target, and the SPX signal has reached the possible near miss target. There is hourly negative divergence here, and all three indices are in the ideal rally high zone, we are expecting a rally high high soon and tomorrow is a possible cycle trend day on which we could see a significant decline. Discussed in detail on my intraday video below.

This is the whole intraday video covering nineteen futures and forex charts, as I haven't posted one of these in a couple of weeks, and if you are just interested in the equity indices they are at the start and there is also a possible very speculative equities decline scenario that I look at in the bonds/ZB section starting in the ninth minute. Intraday Video from theartofchart.net - Update on ES, NQ and TF:

On RUT/TF there is a solid channel on TF that is holding so far. A 60min sell signal has already fixed on TF, and possible RSI 14 and RSI 5 sell signals are brewing on the RUT hourly chart below. This could turn at any time, though it obviously could go higher. RUT 60min chart:

Trendline Evolution At Work

There has been a remarkable similarity on the patterns from last Friday's low on all of ES, NQ and TF, with rising wedges forming, then breaking down. I was expecting consolidation to establish less steep support trendlines and in a remarkable convergence all three of those initial rising wedges evolved into perfect rising channel with the channel support trendlines established at the premarket spike down lows this morning. Will these make it back to channel resistance? Maybe yes, I look at options in the video below. Intraday Video from theartofchart.net - Update on ES, NQ and TF:

On the bigger picture there is a possible double bottom setup on SPX here, but we aren't expecting that to make target, as we don't think that the retracement is done yet. What I think is more likely on on all three indices is that they are rallying to establish the declining resistance trendlines that should then hold until the retracement on each are finished. That may well need to go higher than today's highs first. SPX 60min chart:

Just Another Rally ......... Probably

Nice rally from Friday's low. Not expecting that to be the retracement low but there are fixed hourly RSI 14 buy signals that are not close to target and my lean would be that there is at least some more upside coming. Intraday Video from theartofchart.net - Update on ES, NQ and TF:

On the daily charts RSI 5 buy signals look likely to fix at the close today. Again that is arguing either for a stronger rally here, or that lower lows won't be as definite as the ones that the indices have been making so far. SPX daily chart:

I'm preparing a post putting a strong technical argument that the bull market from the 2009 low is not finished, and having a look at where SPX is likely to be within the structure of that bull market. The post may not be out until after the close tomorrow, but the video segment will be posted on our YouTube channel and I'll be posting the link to that video on my twitter later today.

Another One Bites The Dust

In Chart Chat on Wednesday morning Stan and I were looking at the next support levels on SPX and my pick was triple support at rising support from the Feb 2016 low, and the 200dma and annual pivot levels at 2538/9, all a match with a retest of the ES globex low on Monday night. We were thinking that might well yield a bounce but that SPX would likely go lower afterwards. SPX tested that today, and is bouncing so far, but rising support from the February 2016 low is now broken, after that also broke on RUT on Tuesday morning. Both breaks are likely to follow through to the downside before this retracement is finished. Intraday Video from theartofchart.net - Update on ES, NQ and TF:

What an interesting year it has been so far. It's nice to see a bit of life return to the tape. Does this mean that the bull market is over? Unlikely in my view. I'll be doing a post at the weekend, if I have time, to show why that is. SPX daily chart:

It has been a very intense week. Everyone have a great weekend :-)

On To The Retest

ES made Stan's target area 2700-40 for the rally and all three of ES, NQ and TF have turned back down towards likely retests of the retracement lows so far. There is still a possible case for high retests on these to make double tops to deliver that move, but I was only assigning a maximum one in three to that scenario on the video below, and the odds have reduced further since then. Intraday Video from theartofchart.net - Update on ES, NQ and TF:

The nicest setup to get there is a decent quality H&S on NQ that has broken down with a target at the low retest. Looking for this to make target soon, ideally this week, though I'm not expecting the retest to proceed as vigorously as the original low. NQ Mar 60min chart:

A Significant Technical Break

Well that was interesting yesterday, and that was a really impressive move on equity indices that finally ended the longest trading period in SPX history without a 5% retracement. The mindless bullish euphoria has ended for the moment and overall we should be back in a more two way market environment for a while. In terms of this current move we may now have started a retracement to take us into April or May.

In the video below I'm looking at today's rally. The obvious target on ES would be the 50% retracement in the 2700 area and Stan is looking at the 2700-40 area. After that the odds favor a retest of the overnight lows, which were of course well below yesterday's RTH lows. Intraday Video from theartofchart.net - Update on ES, NQ and TF:

The first big support trendline was broken at the open this morning and that was rising wedge support on RUT from the early 2016 low. That's likely to follow through to the downside after this rally. RUT daily chart:

Is this the start of a crash? Unlikely, as this high is missing some important elements that would usually be seen at a serious top, but we may well be building towards such a serious top within a year or two. This is more akin to the bears starting to wake up after a long hibernation. They're going to need some breakfast, a lot of coffee and some warm-up exercise before they get seriously to work, and we're likely to see equity indices make new all time highs all round before that larger short setup is cooked.

Was the low yesterday a significant low? Unlikely. Again at least some more work to the downside is likely required before equity indices can have another run at the all time highs.

Seven Percent And Counting

I was looking for a decline of more than 5% from the high on SPX to signal that the market was normalising into a more two way trading environment, and that has been hit today, and then some. On the video below I was noting the large amount of positive divergence on various charts and liking the odds for a rally that has not yet materialised, with SPX punching 1% below the daily lower band at the LOD so far.

This is impressive stuff, and the advances/declines level today is suggesting that we may see a repeat of Friday afternoon with a close at or near the low. Intraday Video from theartofchart.net - Update on ES, NQ and TF:

Are there lower targets that are opening up? Yes. RUT broke the first support trendline today and that opens a strong target at the next trendline support now in the 1470 area, bracketed by the yearly pivot at 1476/7 and the 200dma now at 1460. We should see a decent rally soon. After that we likely will need another leg down. RUT daily chart:

Stan and I did our free monthly Chart Chat at theartofchart.net yesterday. If you missed that you can see the recording on our February Free Webinars page.

Well That Delivered Faster Than Expected

Stan and I are doing our free monthly Chart Chat on Sunday at theartofchart.net. We'll be covering the usual wide range of instruments and you can register for that on our February Free Webinars page.

No futures charts or video this afternoon as I tripped over this morning while trying to find somewhere in an unfamiliar city using Google Maps. My phone smashed and that, needless to say, is my primary authentication device for accessing my futures charts.

Only a temporary setback as I have a very good iPhone/iPad repair place, and I am a favorite customer with a bulk discount due to my household having a lot of apple devices, mainly being used by three rather careless/clumsy kids. I'll have the iPhone back tomorrow so I'm inclined to interpret this as a sign from above suggesting that I might consider going to bed early tonight. For a fact, I am rather tired so I think I'll be doing that.

On to the markets then, going old school with no futures charts due to my morning mishap, and may I just say how delighted I am to see the bloodbath on the equity indices today. This was what I was hoping for when the termination triangles on SPX and NDX were spiking up a week ago. If we saw a sharp retracement from those triangle highs then we might well be watching the start of a two way market returning on equities, and those are a lot more interesting than one way markets. So where are we now on SPX, NDX and RUT?

I showed the H&S on NDX in my post yesterday. Obviously that has broken down hard and is close to the target in the 6775 area. That will likely be reached today. NDX 60min chart:

There is a less high quality H&S on SPX with a target in the 2762 area and that target has been reached as I have been writing this. SPX 60min chart:

On RUT the H&S is low quality, and the main target that I am watching is the rising wedge support trendline from the August low, currently in the 1544 area. If that breaks then the low quality H&S target would be in the 1522 area. That trendline in the 1544 area is strong support however and may hold. RUT 60min chart:

I'm hoping to see at least a 5% retracement on SPX from last week's ATH to this retracement low, just to show that this may be returning to two way trade status. That would need a retracement low under 2729.22. We'll see whether I get it. Everyone have a great weekend. :-)

Likely Daily Middle Band Test Next

ES/SPX just consolidating here at the moment, though if there is a break and conversion of the 50 hour MA now at 2841 that would open a test of the open breakaway gap down from 2853.53. In the absence of a break down the obvious next target would be the daily middle band in the 2800 area. Intraday Video from theartofchart.net - Update on ES, NQ and TF:

On the bear side there is now a very decent H&S formed on NDX that on a sustained break down below 6900 would look for the 6775 area. If this delivers then it may well carry the others lower. NDX 60min chart:

Stan and I are doing our free monthly Chart Chat on Sunday at theartofchart.net. We'll be covering the usual wide range of instruments and you can register for that on our February Free Webinars page.