Bollinger Band Moves

SPX closed back above the daily middle bollinger band yesterday and that was unexpected and rare. Generally speaking on a cross significantly above or below the middle bollinger band on the SPX daily chart, there is then a move to the next primary support or resistance level, which is either the next bollinger band, or a major moving average (the 50, 100 or 200 DMA) lying between the middle and far bollinger band in the direction of the break. I can see about twenty instances of that happening in the last year, and a further ten or so when the middle bollinger band was good support or resistance for continuation.

For the current setup where there has been a clear break of the band and then a re break shortly afterwards without a hit of a primary target between, there are only three previous instances in the last year. All of these broke below the middle bollinger band and then back above, and two of those, both in an uptrend since the October 2011 low, then rose to hit either a key MA or the upper bollinger band. The one that didn't was in a downtrend before the October 2011 low. Statistically this close back above is therefore a bullish looking break with a target at the upper bollinger band, currently in the 1482 area, though this signal is weakened by the failure to hit SPX rising channel support at the low, with the 50 DMA in the same area as that support:

SPX channel support has not yet been hit and I would normally expect that to be hit before another hit of channel resistance. If we see new highs before that hit, there is also a much higher chance in my view of a strong reversal at those new highs that would then break the rising channel. We may therefore still see a reversal to hit channel support or a consolidation sideways into that support before the next move up gets going. I have declining resistance on SPX in the 1458 area and a break over that would strongly suggest at least a test of the highs:

On ES the rally yesterday stalled at broken support at 1444.50, and that is immediate resistance. Above that there is declining resistance from the high in the 1449 area and a break above would look bullish. A break below short term rising support in the 1434.5 area and then the 1432 support level would look bearish:

On TRAN the broadening descending wedge has now broken up. I think a low there is likely to be in or at least close. Currently there is a model potential double-bottom setup with a target at 5111 on a higher high over 5003.28:

CL and EURUSD both broke up yesterday but I won't post those charts today as I'm running out of time. The chart I'll show instead is the very interesting TLT chart here. This chart doesn't fit with my QE3 scenario at all and I'll be talking about that more in my weekend post or on Monday. Short term though TLT has hit falling wedge resistance and reversed there. This is a simply lovely technical wedge with textbook trendline and pattern reversals within the wedge so on a break below the current support trendline and (yet again) key 123.5 area support, I have a downside target within the wedge in the 115.5 to 116.5 range. If that happens then the low on equities has most likely already been made or is very close. Obviously if the TLT wedge breaks up (68% bullish pattern) then that will look bullish for TLT and bearish for equities:

I'm torn here. The bollinger band setup is bullish, but there is most definitely unfinished business on the downside as the obvious target at channel support and the 50 DMA in the 1410-15 SPX area has not yet been hit. I'm watching declining resistance on ES and SPX and a break above will mean that at least a retest of the highs is likely. That failure to hit channel support before a test of the highs has longer term bearish implications however, as does the falling wedge on TLT, which should not really be there if we are to see the usual QE script play out here, with bonds and USD falling hard while equities rise strongly. Food for thought.

Channel Magic

SPX broke below the middle bollinger band on the daily chart yesterday and ES has been bouncing overnight. That looks like a bear flag so far, and we'll see today whether the middle BB at 1437.67 SPX and the rebroken SPX pivot at 1440 SPX can now hold as short term resistance. It's worth noting from the chart that the daily RSI is now almost back to 50. In a strong bull trend the 45-55 area acts as decent support as I've marked on the chart, so we are now in the likely reversal zone here for a reversal back up if this is just the retracement on equities that I think it is:

Why do I think that this is just a retracement? Well we have more QE starting now which has boosted equities a lot in the past, and while we could have made a model technical top at 1440, 1475 is much less attractive. Mainly though I'm watching the rising channel on SPX from the June low. I first showed this on July 30th with the comment that only a break below the channel would put me back into bear mode and that's still true. You can see that chart I posted then here. The day after QE3 was announced I was looking for a short term high at channel resistance in the 1470 area and we saw that high made. The obvious retracement target is channel support, now slightly over 1410, and there's no reason to think that what we are seeing is anything other than a retracement unless this channel breaks. I have redone my 60min SPX chart to show how perfect this rising channel is and while it lasts it should be respected:

On the TRAN chart the low yesterday was a whisker below the last low. Obviously this is a potential bottoming setup and if wedge resistance breaks today then most likely the retracement lows on equities are in or being made. This means that a strong bounce today would look bullish. In case this is a double-bottom being made on TRAN I have marked in the trigger level and target on the chart:

Gold showed some weakness yesterday but recovered back into the trading range by the end of the day. My retracement target there is the next rising support level in the 1730 area. There is slight negative divergence on the daily RSI which is worth noting so the retracement could go deeper if 1730 support breaks:

Oil broke below 90 area support yesterday but has recovered back above that overnight. There is some positive divergence on RSI and I'm watching for a break of the declining resistance trendline:

EURUSD has been holding support at the 200 DMA so far and that may hold for a low there. I'm watching the short term resistance trendline for a possible break up:

SPX is now in the area where a retracement low could be made. I'm expecting a touch of the lower channel trendline but we could bounce and then return to hit it at a higher level than it is now. Short term I'm watching the declining resistance trendlines on TRAN and EURUSD particularly today, and if we are to see more downside this week, I'd like to see SPX hold or at least close in or below the 1437-40 range today.

Back on Script

Well I led with the TRAN chart yesterday morning and we saw a perfect and strong reversal at wedge resistance there yesterday. I have wedge support in the 4750 area, though that might not be reached of course, and I think this is most likely the key chart to watch for a signal as and when this retracement on  equities finishes. Meanwhile we are now firmly back on my original script for the post QE3 announcement retracement:

On the SPX daily chart we are seeing a test of support at the middle bollinger band and the broken SPX 1440 area pivot. I am expecting this to break, though possibly not today, and my preferred retracement target is at the channel support trendline marked on the chart:

Looking more closely at that SPX rising channel on the 60min chart I have channel support at 1408 now. My ideal retracement target would be an intersection of SPX channel support and the SPX daily lower bollinger band in the 1410 ES area in the first three days of next week. We'll see how that goes:

On the ES 60min chart I have two strong support levels above 1410 and the first at 1444.5 was broken yesterday. The second is at 1432 ES, roughly at the retest of the SPX 1440 pivot and I have a candidate channel suggesting that we could see a bounce there. If we did that would be on positive 60min RSI divergence and I'd then expect a test of channel resistance, possibly with a retest of broken 1444 support in a day or so:

I had a comment yesterday that the double-bottom setup on CL that I showed yesterday morning could also be seen as a bear flag. Obviously that's right and the key thing to watch there is whether the pattern valley high is broken to make a short term higher high. Bulkowski says that 65% of these setups never manage that and this one didn't either. CL is now testing support at 90, and on a break below I have decent support levels at 87.5 and 85. Any lower than 85 invites a full retracement of the move up from the June lows under 80:

EURUSD reversed at the declining resistance level I gave yesterday and we now have a decent resistance trendline to signal when this retracement is over. My support levels target I gave last week has now been reached at the 200 DMA and broken rising wedge resistance, but there are currently no signs to suggest reversal there. If that breaks I have next big support at rising support from the July lows, and that trendline is currently in the 1.264 area. I can say that there is some political risk here on EURUSD because I am a master of the understatement:

I'm expecting more downside but ES may find short term support at the strong 1432 support level. On an hourly close below I would expect follow-through to the downside. I would like to see my possible declining channel on ES broken quickly. Until it has been broken though that should also be borne in mind.

Resistance Tests

I was explaining yesterday morning that the setups and statistics for this week meant that the ball was with the bears at the start of this week, and it's starting to look as though they immediately dropped it. This might just be another pre-retracement bounce but the odds have definitely been shifting in the bulls' favor into this morning:

I was saying yesterday morning on twitter that if we were to see a bounce on TRAN then the obvious target would be at declining resistance from the high, which would be the resistance trendline on a 55% bullish broadening descending wedge. If we see that hit today, and at the moment that looks more likely than not, then we would probably see some resistance there regardless, but the larger move would be either to break up or to reverse back down into wedge support. A break over followed by a strong reversal down would look like a bearish overthrow that might well then precede a larger break downwards. This is an important chart to watch today:

On the SPX daily chart these sideways moves have been increasingly looking like a bull flag. I would be surprised to see another break much over the upper bollinger band next but that's at 1482 now so there's some upside room within it:

ES is moving back towards the top of the trading range at 1462 and looking at TRAN, EURUSD and oil there's a good chance that will be tested today:

EURUSD has most likely made a short term swing low and is starting another move up. Not definite yet but the marginal lower lows are bullish, and the current low at 1.2885 is just about close enough for a retest of the 200 DMA in the 1.283 area. There are two possible W bottoms in play there, the trigger levels and targets are on the chart, and there is also declining resistance in the 1.298 area to bear in mind:

Again on twitter I was saying yesterday before the open that CL needed to break below 90 to avoid a bottoming setup there. It didn't do that and here is that very nice looking bottoming setup. The double-bottom target will be the 95.7 area on a break over 93.85:

I'm leaning long today into a test of the range top on ES at 1462 and the wedge resistance on TRAN in the 5000-10 area. EURUSD and CL are telling us that the moves on equities may well not stop there. If we see ES and TRAN break up I would expect that to follow through, though on ES and SPX in particular, any break above the current highs would need to be with some conviction to avoid topping setups developing there. Any marginal new highs would be on significantly negative RSI divergence on the daily charts.

QE Rhymes

I've been mentioning the comparison with the start of QE2 almost every day since QE3 was announced. QE2 was also trailed in advance, with a steep rise into the announcement, a break up on the announcement over the daily bollinger bands on SPX, and then a short term high there that was followed by a retracement. Obviously SPX in the wake of the QE3 announcement has been following the same script so far, and that may well continue, as the stats for Mondays recently, and also for this week historically, are both flat to down. Here's the chart of the QE2 period showing the post QE2 announcement retracement on SPX:

Now this analog may not continue to hold of course, but the odds favor at least some more downside this week, and it is well worth noting that after the QE2 announcement SPX retraced all the way to test the lower daily bollinger band. That's currently at 1385, which looks ambitious from here given the number of strong support levels between here and there, but that lower bollinger band is now rising of course, and may well reach the 1400-10 area by the end of the week. Here's the SPX daily chart showing the middle bollinger band currently at 1432 and rising channel support in the 1408 area:

On the SPX 60min chart the high on Friday was a retest of broken short term rising channel support and there are strong support levels at 1450 and 1440:

On both SPX and ES there are decent double or M tops in play here. On ES the target on a break below 1444 is in the 1426 area and I have strong support levels below in the 1432, 1410 and 1388 areas:

The two principal correlated markets for QE3 here in my view are EURUSD and gold, and EURUSD is in retracement mode making lower highs and lows. I have broken wedge resistance and the 200 DMA in the 1.282 to 1.283 area, and that should be decent support:

On gold futures (GC) I have a marginal higher high on negative RSI divergence after a break of short term rising support. I'm expecting more retracement and the M top target on a break below 1753 is in the 1716-25 range, with the next rising support trendline currently in the 1714 area

The odds favor the bears this week. The stats are bearish, the QE2 analog is bearish, and the short term setups on SPX/ES, EURUSD and gold all look bearish. We'll see what the bears can do with that. I think it's unlikely that a major high on equities has been made, though valuations are high, the economy is weak and any further upside on equities will be about the Fed support of equities rather than any fundamental reasons. Nonetheless I am viewing any retracement this week as being a buying opportunity on equities and gold at the least, and very possibly on EURUSD as well depending on what happens there with Greece and Spain, both of which are looking distinctly shaky at the moment.

Dow Theory Musings

ES broke declining resistance overnight and we may be seeing the start of a move to test the highs, very possibly to make a double or M top for the retracement that I am expecting to see. The main alternate scenario is that the retracement low is now in and we are seeing the start of a new wave up and that's possible, but I'm leaning strongly against that at the moment.

On the SPX 60min chart the retracement from the highs so far looks like a bull flag, which is a good reason to think that we might see a test of the highs soon. If this rising channel on SPX from the June low is going to hold, then the maximum likely within that channel would be in the 1480-5 area, with the upper bollinger band in the 1482 area today. Equally if that channel is going to hold then the main retracement has not yet got going, and I have a possible target for that at the intersection of rising channel support and the May high in the 1415 area at the start of October:

Will that channel hold though? Looking at my chart of the moves up since the 2009 low the angle of the channel a bit steeper than the drives into the 2010 and 2011 highs and shallower than the drive into the 2012 high. It's worth noting though that the drive into the 2012 high though is probably better viewed excluding the October low, in which case it was exactly as steep as, and slightly shorter than, the move into the 2011 high. I've added that box onto the chart as an alternate.

In terms of the width of the channel it is currently much narrower than any of the moves since the spike up after the 2009 low and may well need to widen as the move continues.On balance if there is going to be a break out of the current channel it would most likely be downwards, to establish a support trendline closer in angle to the last three moves, and it's worth remembering that the channel I was using at the start of QE3 broke downwards on the retracement after the announcement. Here's that drives chart:

I was reading Pretzel's post this morning and he was looking at the NYA chart. There was a possible H&S forming on that chart but the last moves up killed that off and also broke declining resistance from the 2007 high through the 2011 and 2012 highs. As Pretzel noted, there is nothing currently bearish about this chart, and the next obvious move within the rising channel from the 2009 low is a move up to channel resistance at at a test of the 2007 highs, with resistance at the 2011 and 2008 highs on the way there. I'm showing this chart just to note that there is also an argument there that the current SPX channel might break up:

That brings me onto the Dow Theory (DT) musings today. Now there are strong DT divergences here between Dow and TRAN. Dow has broken over the 2012 high and is within striking distance of the 2007 high. TRAN actually made all time highs in 2011, so a new all time high on Dow would end the first DT divergence and confirm that 2011 all time high on TRAN.

Since that 2011 TRAN high however TRAN has seriously underperformed Dow, and is currently well short of even a new 2012 high, and further short still of that 2011 high. What is this telling us? The idea behind this is that when TRAN outperforms Dow the real economy (consumption requiring transport) is outperforming the stock market, and when Dow outperforms TRAN that the stock market is outperforming the real economy. What the current divergence since the 2011 TRAN high is telling us therefore is that the stock market is outperforming the real economy by a wide margin, and looking around at various economic indicators that is obviously right.

Does it still matter though? There has never been a period since Dow Theory was formulated in the 1920s and 1930s when stock market has been openly supported by the US government, but we are now in such a period, with the stated intention by the Fed that they want to boost asset prices including equity markets in the hope that will drag the real economy up with those. It seems unlikely that the real economy will be boosted much by higher asset prices, and may instead be seriously hurt if commodities, particularly oil, take off again in a big way in response to QE3, but we have to consider that QE3 may drive asset prices much higher regardless. Here's the Dow vs Transports chart from the 2011 lows, with a particularly stark underperformance from TRAN in recent days.

It is central to Dow Theory that governments cannot manipulate the primary trend of the market for long, but after the last few years I think that is at best open to question. In the absence of government intervention I think that there is a very good chance that the huge bear topping patterns in many indices (including NYA above) that were forming since 2010 would now be playing out. Instead they are all breaking up one after the other and to that extent the Fed's moves to support the equities appear to have been very successful so far. The obvious question to ask however is how long that can last, and how far up equities can be driven in the absence of support from the real economy? I don't know the answer to that question, but I'm doubtful about that persisting indefinitely. In the short term however the technical bear case on SPX is in shreds, and the current SPX highs don't seem at all likely to hold more than a few weeks at most

Just looking at TRAN, it reached triangle support yesterday and pinocchioed it slightly at the low. A break below that would look distinctly bearish, and open up a test of the June lows there, with TRAN having already given back 66% of all gains since that June low at the close yesterday. The TRAN chart is currently trading entirely at odds with Dow, which has been forming a bull flag near the 2012 highs last week. Food for thought:

Back to the short term EURUSD has broken back over declining resistance from the current high and the 1.30 level. This is provisionally bullish and I'm watching to see whether it can make a short term higher high in the 1.3075 area:

Gold held short term channel support on GC and has formed what looks like a rectangle targeting the strong resistance in the 1800 area. Again provisionally bullish into that test of major resistance:

I've been mentioning a possible retest of the SPX highs all week, and today is the most likely day to see that happen. If we were to see the current high break I'd be looking for strong resistance in the 1480-5 area, and if the current rising channel on SPX is going to hold, then the high from this current move would start the main body of the retracement within that channel.

There is a possibility that the channel will break up however and that needs to be borne in mind. Apologies for being a bit wishy-washy on this, but we are in a transition period at the start of QE3, and we don't yet know how powerful the Fed boosting effect is going to be with equities already so high and the growing divergence between equities and the real economy. I'm expecting channel resistance to hold, but I could be mistaken.

No Opex Bounce So Far

The most important chart for direction today is the SPX 60min chart. SPX bounced at short term channel support on Tuesday and has been sort of crawling up it since. If it gaps under it at the open, which looks likely, then we might see a retest but the chances are that it would follow through on the downside soon. I'd be expecting a retest of the 1440 pivot today or tomorrow:

On ES we now have a technical M top which has broken below pattern support overnight. It isn't a pretty pattern, but the target in the 1433 area fits with a test of the 1440 SPX pivot area:

There really isn't much positive RSI divergence from anything overnight, except for oil which is suggesting a bounce here. I'm expecting more downside afterwards and am looking for a short term rally to establish a declining resistance trendline that doesn't look like an arrow pointing straight down. Significant resistance areas around 92.5 and 94.3:

EURUSD has now broken under 1.30 but I have nothing to say here that I didn't say yesterday morning. Instead I'll show the GBPUSD chart that is suggesting that more downside for GBPUSD (and by extension EURUSD) looks likely

I like the idea of some sort of bounce into opex tomorrow, but I'm not seeing a lot to support that right here. if SPX tests 1440 today then that is a decent level to expect some kind of a rally. On balance I'd be expecting more downside after that rally but it's worth noting that 1440 SPX is my first retracement target after the channel resistance hit last on Friday

My wife was unwell overnight. Just a stomach bug of some kind I think but I didn't get a lot of sleep.  As a result I probably won't be around much until late in the session as I'm badly in need of a nap. I ran out of time this morning and am posting late so I will be posting the last three charts for this posts on twitter at @shjackcharts after I finish this post.

Possible Rally Here

SPX closed under the daily upper bollinger band for a second day. The upper bollinger band is now at 1468 so we could well now see a test of the highs this week that stays within the bollinger bands. A move back well above the daily bollinger bands at this stage wouldn't be unprecedented, but would be most unusual:

On the SPX 60min chart SPX hit the short term support trendline I looked at yesterday morning and if we are to see a rally within the overall retracement I think is likely here, then this is the most likely place to see that. If we see that rally here, then that might well retest the highs to form a short term double-top and set up the main retracement:

On ES the support trendline has not yet quite been hit, though ES is closer to that hit than it was when I capped this chart. As with SPX we may see a bounce from yesterday's low here and I have marked that in as the potential valley low of the possible double-top that may then be forming:

EURUSD bounced at the rising support trendline I was talking about yesterday morning when it was hit yesterday afternoon, and then broke it overnight. EURUSD is now testing the strong support level at 1.30 that I also mentioned. Again we could well see a bounce here and if we do then there is currently slight positive divergence on the 60min RSI. Now or later I am expecting a break back below 1.30 to retest the 200 DMA and broken rising wedge resistance in the 1.28 to 1.282 area. My apologies for this practical but visually unappealing chart. Not up to my usual aesthetic standards but I needed to use the daily chart to show the 200 DMA target:

I mentioned strong resistance in the 1800 area on gold, and it looks as though a short term high may be setting up somewhat below that. On a break below 1750 the double-top target would be in the 1725 area, and I have current rising support then in the 1705 area. Overall I remain very bullish on gold, which I would regard not so much as appreciating in dollar terms over the course of QE3, as remaining static while USD declines against it. We may well be near the start of a very impressive bull run on gold:

If we're going to see a bounce to form a double-top then this is the most likely place. If we see yesterday's lows broken then I would see that then as much less likely. Either way I'm thinking that we are starting a retracement that should test 1420 or 1400 on SPX, though it might possibly find support at the broken 1440 pivot of course. Leaning bullish today unless the support trendlines on ES and SPX are broken. Any rally scenario on SPX would obviously be assisted by EURUSD holding 1.30 support today and it will be a warning signal if EURUSD breaks below that.

Deja Vu So Far

I was reading a writeup from a fairly well known analyst yesterday stating confidently that QE announcements are followed by bull runs of 10% to 15% in the following four to six weeks. He shall remain nameless, but the evidence doesn't really back up that view. It's true that when QE1 was announced in November 2008 there was a rally from the 800 area to the January high at 943.85 but there's a very good argument that was coincidental, as SPX was already rallying from a very oversold short term double bottom at 741.02 into the January 2009 high before the final bear market decline into the March 2009 low. The picture from the announcement of QE2 looked rather different.

When QE2 was announced on 3rd November 2010 SPX had already been rallying hard for a couple of months. SPX broke well above the daily upper bollinger band into a high within a couple of days which was then followed by a sharp retracement into the end of November. It was four weeks from the announcement before that high was tested again and six weeks after the announcement SPX was only 2% or so higher than that post-announcement high. Here's the QE2 period chart on the daily with bollinger bands:

4th November 2010 was a Thursday, like the QE3 announcement on 13th September this year, and on the Friday 5th November 2010 morning I wrote that the technical bear case had now been largely demolished, but that I was expecting strong resistance and a very possible short term high at channel resistance on SPX and ES, which were both slightly overshot before that high was in fact made shortly afterwards. You can see that post from 5th November 2010 here. This may all be sounding very familiar, as it should, as the sequence of events over the last few days has so far been almost identical. That doesn't mean that the rest of this analog will play out as well, but the similarities so far are very striking.

On the daily chart SPX closed back within the daily bollinger bands yesterday. Generally speaking I would expect SPX to remain within the bollinger bands for a while now, though we would sometimes see SPX ride up the underside of the upper band for a while. If we see further retracement then I have the middle bollinger band in the 1422 area and rising channel support in the 1400 area. It's worth noting that the main channel support that I was watching at the QE2 announcement was broken on the retracement afterwards, and if we see that happen again then channel support would most likely be broken in the 1410-20 area and there is still very firm support in the 1400 area:

On ES the raggedy little upsloping H&S that I was looking at yesterday morning has broken down and retested, and the target there is in the 1440 area. I have short term rising support on ES in the 1446 area today:

I was looking at the Transports index yesterday, and I was planning to write about the Dow Theory divergence today, and whether that still means anything with the Fed supporting equities with QE. I won't have room for that today but I'll still show the large symmetrical triangle on TRAN in an overall setup that is strongly suggestive of more retracement here:

Looking at other markets my friend chewtonic showed me a nice looking falling wedge on TLT on twitter this morning. The lower trendline isn't as nice on Stockcharts for some reason but it still looks valid. The setup on the daily chart is strongly suggesting a test in the 115 area, but the positive divergence on the 60min RSI is already delivering a bounce at wedge support. Within this falling wedge we could see a bounce on TLT into the 123-5 area (strong resistance 123.5 to 124 area of course), followed by that move to test the 115 area, and that would fit with an extended retracement on equities here. We shall see. Here is chewtonic's chart and he posts on twitter at @chewtonic:

There was a significant decline on oil yesterday and I'll show that on the USO daily chart today. Oil still has a cautiously bearish looking chart and you can see that it patterns well and that the high probability patterns on it generally make target. Wedges are not high probability patterns, but the setup is still bearish on balance, and on a break below the strong support /resistance area at 35 (about 94 on CL), I'd expect to see a significant follow through to the downside:

EURUSD had a nice bounce yesterday, to a very marginal new high, on strongly negative 60min RSI divergence. Overnight that short-term double-top has almost played out to target and I have short term rising support in the 1.302 area and a significant support level at 1.30. On breaks below I'd be looking for a retest of the broken rising wedge resistance trendline and the June high in the 1.28 area:

I've been up to eight charts per post again in recent days as there have been so many interesting charts to show. I should be back to the usual five or six tomorrow but for my eighth chart today I'd like to show the very thought-provoking SPX monthly (LOG) chart since 1980. You can see that on this chart the 1980-2000 secular bull market resolves into a single rising channel, and that the action since has formed a huge (direction neutral) right-angled and descending broadening formation. Now I don't tend to trust these huge patterns for targets, and in the event that this pattern broke down I think I can confidently rule out the possibility that SPX would reach the pattern target at -220ish, but the pattern is suggesting that we are likely see a test of the 2000 high at 1553 and/or the 2007 high at 1576, and that if we see that test, we may well then also see a very major top there. On a break up the pattern target would be in the 2450 area and that would then be at least worth bearing in mind. What USD might be trading at by that stage is anybody's guess of course:

We haven't yet reached the point of decision to see whether the retracement from Friday's high will develop into the sort of multi-week retracement that we saw after the post QE2 announcement spike up. I'm seeing that point of decision at short term rising support on ES at 1446 and the equivalent rising support trendline on SPX just over 1450. If those break and we see an hourly close below them then I'll be looking for continuation into a test of 1440 SPX broken resistance, and on a break below that, into the top of the descending triangle in the 1420 SPX area. As I mentioned, the post QE2 announcement retracement broke my channel support then,and if we see that happen here I'd be looking at strong 1400 area support which I'd really be expecting to hold.