The Badgers are Grumbling

Yesterday morning's triangle failed 4 handles short of target, and what I had predicted would happen after the triangle thrust ended played out fast on SPX, with Monday's low being broken mid-afternoon. So what now?

There is a mixed picture here with decent cases both for a move to the 2110-6 SPX area to finish the move up that ended abruptly yesterday, and if bulls can recover back over the 50 hour MA at 2089 then that is still on the table. If that level is now resistance then the top priority for bears is to break below the daily middle band at 2077 on a daily close basis, which would open up targets further down. SPX 60min chart:

The best pattern setups here are on RUT and TF and I'd note that I have open targets below in the 1185 RUT and 1180 TF areas. We might see a bounce first but they should be hit soon. TF 15min chart:

If bears can follow through on yesterday's decline then I have a nice looking target on RUT in the 1170 areas that could hold for a modest Santa Rally. RUT daily chart:

One reservation I have here is I have a likely bull market top forming here, and we now have close to ideal full topping setups on RUT and NDX of the kind that I would expect to see at that kind of top. Bulls have seasonality on their side though through December, so I've marked in on the RUT daily chart a possible scenario that would allow the bulls to limp through to the end of the year, with a likely hard decline starting early next year. This could well play out that way and I'll be watching that setup.

I have been told that I don't spend enough time talking about my calls that deliver hard, and maybe that's because I'm a Brit trained that boasting is bad, but I am particularly pleased with the last 24 hours. There were three calls on ES/SPX that really delivered and the first is from my post yesterday when I said:

The other thing to consider is that this kind of triangle setup generally marks the end of a move, so the next obvious step after the triangle thrusts ends would be a retracement that would take out Monday's low on the way to targets lower down. 

The bulls were looking unstoppable at the time I wrote that and yet here we are :-)

The other two calls were in the Princeton Trader trading room, where I called the topping pattern in the first hour:

shjack_charts (10:22:40 AM): On a break below 97.5 (ES) the H&S target would be in the 92.25 (ES) area (SPX pattern)

and the overnight rally back into the 90s at the close:

shjack_charts (04:01:12 PM): On a break over 83.5 the double bottom target would be 92

Anyway, that's enough talking about nice calls to defend myself from my wife when she next tells me that my self-promotion skills are close to non-existent :-)

With USD having turned back down today I could spend a while talking about that call too, but you can come see what Stan & I are expecting next across numerous markets at the free to all Chart Chat at theartofchart.net on Sunday afternoon. Be there or be less well informed than you could be. :-) The signup link is here.