Groundhog Day

For the third day running ES is opening up with the weekly pivot at 2050.50 and that will once again be the key battleground level today, supported by the SPX 50 hour MA at 2058.8 effectively being at the same level. On Wednesday bulls had the technical edge and dominated the day, but couldn't hold the move. Yesterday the bears had the technical edge and dominated the day but rallied back in the last hour to close at the daily middle band on SPX, failing to break this key support level on the daily close and setting the stage for this overnight rally back to the ES weekly pivot.

So who has the technical edge today? Well the first thing I would say is that today, unlike Wednesday and Thursday, is not a cycle trend day, so a two way day is more likely today. There are two main options today and the bullish option is that the daily middle band has held and the topping patterns on ES, NQ and TF are failing. IF ES can convert the weekly pivot at 2050.50 back to support and then fill yesterday morning's breakaway gap at 2060 then the obvious next move is to a retest of the current rally high. This scenario is supported by the falling wedges breaking up on TF (shown below) and SPX (not shown).

The bearish option is that larger H&S patterns are forming on ES and NQ, and that we'll likely consolidate within yesterday's range today while that right shoulder forms. This option would be weakened by the bulls converted 2050.50 back to support and die on a fill of yesterday morning's gap at 2060. This scenario is supported by the open strong daily sell signals on all three indices.

ES Jun 60min chart:

NQ Jun 60min chart:

TF Jun 60min chart:

I'm just using the index bonus charts that I've posted for theartofchart.net subscribers this morning as I'm running late. I'm keeping an open mind today but as long as the ES weekly pivot at 2050.50 and the SPX 50 hour MA at 2058/9 hold as resistance bears have the short term edge. If they lose that resistance then we could well see a retest of the highs, though that might well be on Monday rather than today.

Stan and I are doing our monthly public Chart Chat on Sunday afternoon and as usual we will be looking at a wide range of equity indices, forex, bonds, energies, precious metals and will also be covering CAD, Yen and AAPL along with some others that aren't part of the regular program. All are welcome. Be there or be less well informed!. You can sign up for that on this page here. Everyone have a great weekend. :-)