Working Title

Running late today as I was out looking at a school this morning, so I've given everyone access to the charts that I post every morning for theartofchart.net subscribers. You can see those here.

There is only one remaining big resistance level for me (2060 area) before my main scenario will be that SPX retests the all time high, and SPX has gapped over it this morning, so we have a candidate breakaway gap. This is a very bullish development as long as the gap is not filled today. A gap fill would signal that the short term high is either made or being made. SPX weekly chart:

What are the odds that this gap will fill today? Well we really are very overbought on SPX/ES here. I've mentioned before that my trading bud Mike Vacchi of princetontrader.com has a system for measuring overbought/sold on ES relative to the 45 day pivot, which is currently at 1980.92. It's rare to see a signal on this system but the important levels are:

• 70+ over 45 day pivot - Crazytown
• 80+ over 45 day pivot - Bet the House
• 90+ over 45 day pivot - Extremely rare area with no name - Working title 'WTF?'

We hit 91 over the 45 day pivot at the RTH high so far today. Generally a level at crazytown or higher will trigger a strong reversal within hours, though that took three days at the October low if I remember rightly. I've only been watching this for a few years but I can't remember any that didn't trigger at least a strong short term reversal. We'll see how this one goes.