De Nada

The bears didn't have a good day yesterday, with a larger than expected decline on the indices, and clear breaks at the RTH on SPX close back below the daily middle band, the 50 hour MA and the 5dma, and ES losing the key weekly pivot area at 2152.25 that I highlighted as a key close area on a tweet yesterday afternoon. With the historical stats for the last day of September leaning 75% bearish, and the indices resting on key support levels the odds of the ATH retest on SPX that Stan and I have been looking for definitely looking lower, and you can see that reflected in the tone of my comments last night on the charts below.

Overnight though the picture changed entirely, with marginal new lows and 60min buy signals fixing on ES, NQ and TF, and with a triangle confirmed on NQ and a perfect bull flag channel established on TF. On my premarket video for subscribers to the Daily Video Service at theartofchart.net today I was leaning strongly bullish, and I've not seen anything since then to change that view. I'm thinking 50% odds or better that SPX trends up today. The direct link to that video is here. Hopefully some of you saw that when I posted that link on twitter before the open today.

60min buy signal fixed. ES Dec 60min chart:

60min buy signal fixed. Likely bull triangle forming. NQ Dec 60min chart:

60min buy signal fixed. Clear bull flag channel established. TF Dec 60min chart:

The action on GC overnight was strongly supportive of the expected move to the 1355-60 area. Unless GC breaks below yesterday's low at 1317 this morning I'm expecting to see that made. For anyone trading this with me I have a hard stop just under yesterday's low, as a break below opens a possible test of 1280. GC Dec 60min chart:

ZB retested Wednesday's high as I suggested in yesterday morning's video. I have initiated a short at 170 looking for a 10%+ decline in ZB from here to 153 or lower. I'll be taking some profits on the way down of course and the move is likely to take several weeks at least. ZB Dec 60min chart:

Everything going as planned so far today. I'm expecting that to remain the case. We'll see. Just a reminder to all that Stan and I are doing our monthly public Chart Chat on Sunday looking at the usual 35 or so instruments across a wide range of equity, commodity, forex and metals markets. If you'd like to attend you can register for that on this page here. If you dislike seeing top quality technical analysis in action,  or you prefer to trade in ignorance of the higher probability paths on price, I would suggest you not attend as our forecasts may spoil the surprises for you on price next month. Everyone have a great weekend :-)

Will Trendline Number Three Please Stand Up

The bulls had a good day yesterday and delivered solid closes back above the SPX daily middle band, 5dma and 50 hour MA. Intraday today though SPX has been knocked down hard on some Deutsche Bank news so today it is the RTH close on SPX that is important. The three levels of resistance, turned support, turned possible resistance, that bulls would very much like to close over today are the daily middle band at 2157 and the 5dma and 50 hour MA at 2159/60. If we see a close below today then the high for this window may have been made yesterday. SPX 60min chart:

On ES that battle for the close in effect at the weekly pivot at 2152.5 area. The news pushed below both of the possible support trendlines I mentioned on the chart below but the current LOD was at the thick yellow trendline that I was expecting to see hit on Tuesday but was missed then to be tested today. That's a decent low area and the bull scenario is just fine if we don't see serious support breaks at the close today. We'll see. ES Dec 60min chart:

I posted my premarket video on twitter earlier, but if you'd like to see that the direct link is here.

Just a reminder that Stan and I are doing a free to all educational webinar tonight on trading entries, exits and strategy, and if you'd like to attend the link to register for that is here. Stan and I are also doing our monthly public Chart Chat on Sunday, and that will be about 70 minutes of top quality TA covering about 40 instruments across a wide range of markets. At an all inclusive price of zero dollars this could well be the best value TA education investment that you make this year, and if you'd like to attend you can sign up for that here.

Symmetry

SPX made a marginal lower low yesterday as expected and then rallied back into main resistance at the daily middle band, which closed yesterday at 2158/9, with the 5dma and 50 hour MA slightly above in the 2161/2 area. SPX closed a handle above the middle band but in practical terms I count a close less than two handles away from the band as a close on it.

One thing you often see in this kind of situation is a kind of symmetry where unusual setups can repeat several times in a short period and we might have a situation like that here. The last two times that the middle band was tested SPX gapped through it and at the open today SPX has gapped through it again. Both of the last two gaps were breakaway gaps that did not fill that day or the day after. We may see that again today and, if so, that would be a strong start to the ATH retest that we are expecting. SPX daily chart:

The key level on ES today is the weekly pivot at 2152.25, and ES has gapped over that this morning. If that can be converted into support this morning then the upside is wide open. If that can't be converted to support then we could still see another test of yesterday's low. ES Dec 60min chart:

SPX has filled the gap so the breakaway gap up option is off the table. The main options for today and tomorrow are either an AM low today, conversion of overhead resistance to support, and then a direct move up, or a hard fail here that delivers a retest of yesterday's lows and possibly a marginal lower low. If we see that option then I have some trendline support in the 1331 ES area (approx 1338 SPX), and ES must not break below 2121 ES as that would invalidate the triangle and possibly kill off the ATH retest option in this high window.

The gold trade is looked at in detail in the video and at this test of 1325 this morning I now have a 60min buy signal brewing on GC. We are looking for a reversal back up in this area to the 1360 area, and there is an inflection area there to either fail down to the 1280 area or continue on to wedge resistance in the 1450 area, I'll be looking at the inflection setup in detail at that test.

I'm posting the premarket video that I do every morning for Daily Video Subscribers at theartofchart.net, as a promo this week, as we are raising the charges at the end of this month and anyone subscribing before then can do so at the current lower price. Blogger doesn't seem to be embedding videos for me this week so the direct link to that is here. If you're interested in subscribing then the subscriptions page is here. The daily video service is comprised of my morning video with the futures charts posted with the video and Stan's post market video in the evening. For any one of the surprising number of traders looking for the certainty of genuine clairvoyance we are sadly unable to provide that at the moment, but we do a pretty impressive job nonetheless just using math.

Next Sunday is the first Sunday of October and we are doing our usual monthly public Chart Chat which is free to all, and if you are interested in price direction on the 35 or so instruments we cover there, or just enjoy top quality TA, then you can register for that here.

AM Low Then Go

That was a strong retracement yesterday and the H&S targets that I was talking about on ES and NQ yesterday morning slightly sceptically have been made. What happens today is very important as the scenario that Stan and I are running here is that ES has broken up from a triangle into last week's high, and the sequence after this kind of triangle break is a backtest of the triangle, which is happening now, and then the main triangle thrust up begins. Ideally that means we see a low on ES this morning, very possibly reverse yesterday's move entirely over the rest of the day, and then thrust up to a retest of the all time high over the rest of the week. After that triangle thrust ends we should see a full retracement back to the level of this morning's low and then we'd expect that to be the start of the larger retracement down that I've been talking about.

If you're wondering how that looks then this is almost exactly the setup I was projecting on TNX a month ago and I show that example on the video below, so you can have a look at that to see a very nice example there playing out.

Assuming that the triangle scenario delivers, I'd like to see rising support in the 2131 hold, and invalidation of the triangle scenario comes on a break below 2121 (approx 2128 SPX). ES Dec 60min:

Pre Market Video for Daily Video Service subscribers at theartofchart.net - I'm posting these publicly every day for the remainder of September as a promo. I've been having trouble embedding these videos on blogger and it seems to have given up trying altogether now so the direct link to that is here. Any of you in the GC trade should watch it and any of you trading bonds should really watch the last part of the video where I'm looking at ZB and TNX.

Retracement Targets

SPX closed Friday at a decent looking support level but when I was looking at the SPX, RUT & NDX charts over the weekend it was pretty obvious that the bulls were going to have their work cut out for them today. Below are the SPX and RUT charts I posted for Trader Chart Service subscribers at theartofchart.net yesterday. I haven't changed the text but price has been updated and I've removed the gap that was filled on SPX at the open this morning. 

You can see that SPX has broken below the rising megaphone support that I was looking at as a target on Friday morning. SPX 15min chart: 

On RUT rising megaphone support is now in the 1241 area and I'm looking for possible support there. RUT 15min chart: 

Pre Market video for Daily Video Service subscribers at theartofchart.net - I'm posting these publicly every day for the remainder of September as a promo. I've been having trouble embedding these videos on blogger and it seems to have even stopped trying at all today so the direct link to that is here. 

Stan and I are looking higher after this retracement, and at the time of writing a 60min buy signal has fixed on TF, and 60min buy signals are brewing on both ES and NQ. On SPX buy signals are also brewing on the hourly RSI 5 and the 15min SI 14 and a buy signal has already fixed on the 5min RSI 14. SPX might go a bit lower but the odds of a reversal back up soon look high. 

Stan and I are doing an educational webinar after the close on Thursday. This is free, as they all are actually, and the subject of this one is 'Setups Entries and Exits - Learn how to make money in trading, even when you are wrong'. If you'd like to attend then you can sign up for that here. 

Entering The High Window

The high window opens on SPX today and runs through to Monday 3rd October. During this period Stan and I are expecting to see a very significant high made that would then be followed by a decline that would be considerably larger than the modest retracement just completed. We are looking for a likely full retest of the all time high, with an eye on higher targets in the 2203, 2206/7 and 2210 areas.

On the daily chart SPX confirmed the break back over the daily middle band with another close above it yesterday. This opens a possible test of the daily upper band, currently at 2202. I'd generally expect to see a retest of the middle band from above today or Monday, and that is currently in the 2161 area. SPX daily chart:

On the SPX 60min chart the weak RSI 14 buy signal has made target, and there are now alternate double bottom targets at either the retest of the all time high at 2193, or the full double bottom target at 2206. SPX 60min chart:

Is there a reason to think that SPX might retrace a bit here? Yes. The very nice rising megaphone on SPX show below definitely favors some retracement here. SPX 15min chart:

RUT has made a new high for 2016. Very strong trendline resistance is in the 1275 area. If we are to see a full retest of the all time high at 1296 in this window, then that strong resistance trendline would have to be broken. RUT 60min chart:

Pre Market Video for Daily Video Service subscribers at theartofchart.net - I'm posting these publicly every day for the remainder of September as a promo. If you are having any trouble playing this video please use the direct link here:

Everything is going to plan here on the scenario I've been laying out as our preferred option over the last couple of weeks. Shortly we see if SPX can make a higher high and then (this bit is important) fail hard from that high into a break down from the rising wedge from the February low. As ever, only time will tell :-)

Pre Market Review Video

Everything going as planned on the bull scenario so far with SPX breaking up yesterday and closing back above the daily middle band. We may well see a backtest today but the main thing to watch is that SPX doesn't deliver a rejection candle that invalidates yesterday's break up. I'm not expecting to see that but it's always something I watch for after a middle band break.

As long as we don't see that rejection candle we're looking for a retest of the ATH and possible higher high with an ideal target at that retest or in the 2210 area. The high window opens tomorrow and lasts a week or so. We are expecting to see a significant high in the window that would be followed by a larger retracement.

Pre Market Review Video for Daily Video Service subscribers at theartofchart.net:

Stan and I are doing a free educational webinar after the close on Thursday next week. The subject is 'Setups, Entries and Exits - How to make money in trading even when you are wrong'. That's a free public webinar and if you'd like to attend you can register here.

As I mentioned yesterday we are increasing prices on the Daily Video Service and Triple Play Service at the end of next week, so if you're thinking of subscribing you can lock in the current price by subscribing before then. Free trials for the Triple Play Service are available here.

FOMC & CB BS - WTH

With the BOJ last night and FOMC today there is likely to be significant market turbulence even with the likely net announcements not amounting to much. The Fed will reveal today where rates will remain at almost nothing, or be raised to slightly more than almost nothing, and while it's a little hard to see why that should be particularly interesting, the markets will be watching that carefully nonetheless. trade safe!

I've already done two webinars today so I'm going to save myself some time today by using the premarket video and charts that I did this morning for Daily Video Service subscribers at theartofchart.net. I've been doing the charts every morning there for a while but have recently added the video and that is being incorporated into the Daily Video Service next week, by which time we will have settled on a likely new name for the service that is a bit more catchy. The service also includes Stan's post market update video and the private twitter feed which is updated during regular trading hours

I'll be promoting the service quite a bit into the end of September because at the end of this month we are increasing prices for new subscribers from the start of October from $99 per month to $149 per month. We are talking seriously about increasing that again to $199 per month early next year, at which point we still think it would be very cheap relative to the content that we are delivering. We will be increasing the price for the Triple Play Service (which includes the DVS) from $199 per month to $249 per month at the start of October as well. We operate a price guarantee for all subscribers that no price increase will ever be applied to a subscriber who maintains a continuous subscription, so the current prices will be locked in for all existing subscribers and any new subscribers who subscribe before the end of September.

We are offering two week free trials which you can find here, and you won't be charged anything on that unless you continue with us beyond the two week free period. Our conversion rate from trial to subscribers is high, in the month since we introduced these conversion at about 50% I think, and if you want to see why that is, take the trial :-) I suspect you'll be impressed too.

Have a look at the video and charts below and if you think that is too much for you then no problem. If you can see your trading improving with this sort of, modesty aside, very high quality TA based forecasting laying out the higher probability paths on price on a wide range of markets, then I'd suggest making a decision on whether or not to subscribe before the end of the month.

For those of you with me on the gold long there is a chart below and I look at the current status near the end of the video. We are expecting this gold move to at least reach the 1350-60 area at which point anyone trading a single contract would be up twice as much as an annual subscription to the Triple Play Service at theartofchart.net. This is just one example market that I've chosen as a public promo this month. Just sayin'.

Premarket Video from theartofchart.net today.

ES Dec 60min chart:

NQ Dec 60min chart:

TF Dec 60min chart:

DX Dec 60min chart:

CL Nov 60min chart:

NG Nov 60min chart:

GC Dec 60min chart:

ZB Dec 60min chart:

Equity indices have been compressing over the week so far and we are expecting that to end today. For SPX on a break down we would be looking at main rising wedge support in the 2105 area, and on a break below the next target would be in the 2070-80 area. On a break up we'd be looking for a likely retest of the current ATH in the next few days and have our eye on 2210 as a possible new ATH target area. Everyone be careful today. Central bankers may not ever do much that is of actual use, but they can really mess up otherwise decent trades in the turbulence around announcements. Trade safe!

Resistible Force Stalls At Somnolent Object

The bulls met both of the targets that I gave them yesterday morning in that the 50 hour MA was converted to support and the close was above the 5dma, so the three day rule expired without a bearish break. Somehow though they managed to do that without inspiring any confidence that this uptrend has real legs. If it has at least some legs then I'd be looking for a test of the daily middle band next, currently at 2162. SPX daily chart:

Key support here is the 50 hour MA in the 2138/9 area, supported by the ES weekly pivot at 2129.50. That support zone is the key bull/bear area for today. That's holding so far. SPX 60min chart:

It may be that SPX is going to be something of a yawnfest until FOMC is out of the way. We'll see.

Three Day Rule - Day Three

All charts and video today done last night or this morning for subscribers at theartofchart.net.

SPX spent much of Friday under the 5dma, but rallied to close on it, so the three day rule was not triggered. Bears have a second and last chance today to close more than two handles below the 5dma, currently at 2138.10. If they can then the rule states that we see a retest of the current retracement low at 2119 and likely go lower. If they can't then the retracement low may well already be in and SPX likely rallies into the high window that opens on Thursday 23rd September, ideally retesting the current all time high or going a bit higher into the 2210 target that Stan and I are looking at. SPX daily 5dma chart:

SPX has been retesting broken support from below at 2148 and that's been holding very well on a daily closing basis so far. If that breaks, and for the short term bull scenario it would obviously have to break, then daily middle band resistance is currently in the 2164 area and the 50dma is currently in the 2168 area and those are both significant resistance levels. SPX daily chart:

First resistance that bulls would need to convert today though is the 50 hour MA, currently in the 2144 area. That was the high on Thursday, and if bulls can convert  that to support and close at or above the 5dma today then the short term bull scenario into a retest of the ATH at 2193.42 will be off to a very promising start. SPX 60min chart:

I'm reorganising my work schedule at the moment to try to produce more timely content for subscribers at theartofchart.net without having too many very late nights, and one thing I'm likely to introduce for the Daily Video Service subscribers is a premarket video every morning. I'm running the trial for that this week and this was the one I did this morning. Very decent hit rate so far. In future when I'm doing an update across the main range of markets that we cover at theartofchart.net I'll be posting one of these videos rather than the main eight charts they are covering, which are the ES, NQ, TF, DX, CL, GC, ZB and NG charts.

For any of you following the gold long I was playing last week there is an update on that in this video. Premarket Video Experiment;

I like the long side on SPX/ES into FOMC on Thursday this week but there are a couple of reasons to think that it might go the other way on NQ and TF. I look at those on the video. Trade safe :-)

Back On The Three Day Rule

A very nice day for calls yesterday (buffs fingernails modestly) with RUT following through on the falling wedge I called in my AM post, the possible trend up day I called playing out, and then calling the likely (and actual) high of the day in the afternoon just after it was reached on twitter (shjackcharts). Hoping some of you guys caught some of that and the perfect SPX rising wedge from the low that I posted on twitter with the high call.

SPX broke back over the 5dma yesterday and that puts SPX back on the three day rule. On a break (2 handles +) back below there at the close today or Monday, that would require a retest of the current retracement low at 2119 and likely lower low. With the 5dma at 2137 at the close yesterday that wouldn't be a big move though. SPX daily 5dma chart:

The high yesterday was a test of both broken support at 2148 and a precise retest of the 50 hour MA as resistance. That leaves this downtrend intact, and we could see a marginal lower low, though I'm not really expecting much more than my 2108 weekly punch stat target if we see that here. At this point I'm thinking that the retracement low is likely already made or about to be made, with a decent rally coming in the next few days which ideally would make a new all time high in the 2210 area in a few days, making what might well be the second high of a double top setting up a considerably larger retracement than this one. . SPX 60min chart:

The rising wedge for yesterday's trend up day is shown on the chart below and the obvious targets here are either one of the 50% fib retrace target at 2135 (testing now), or the 61.8% fib retrace target at 2132 or on a break below 2130, then a retest of the current retracement low at 2119 and a likely lower low. I'd like to see main rising wedge support in the 2095-8 area tested, but I'm a bit doubtful about that at this stage. 5min chart:

I wouldn't be surprised to see a low at whatever level this morning followed by a strong reversal back up. A trend down day seems unlikely at the moment. Everyone have a great weekend. :-)

RUT Breaking Up

SPX has now completed for days of a daily lower band ride, and for the last three days SPX has been testing the 100dma at 2121/2, and that's been looking pretty solid. The two obvious targets below are the minimum 3.9% target below from weekly upper band punch stats at 2108 and rising wedge support in the 2095 area.

Do those targets need to be hit on this move? Well if SPX returned to retest the ATH and only made a marginal new high then this might just be part of the topping process, something which I think is likely in any case, in which case the 2108 target could be hit, and likely exceeded on the next swing down. The current low would also be a (bigger picture) near miss of wedge support on SPX, something seen often before a rally, and then break down through it. It's possible that this retracement low could be in, though so far I only have 60min buy signals fixed on ES, and brewing on RUT. That's thin but maybe.

If we do see a strong rally here then the resistance levels to watch are the 5dma at 2134 (daily close basis), the 50 hour MA in the 2155 area, and the 50dma and daily middle band currently both in the 2166-8 area. SPX daily chart:

What is prompting these musings about a possible early low? Well I mention regularly that I watch RUT carefully as it patterns very well, and this break up on the falling wedge on RUT from the highs is not an encouraging sign for more downside short term. RUT 15min chart:

If the short term low is in then this shouldn't be a big low. I'd be looking for a marginal new all time high on SPX, ideally in the 2210 area in a few days, and then a bigger retracement that would start there. We'll see how it goes today. At the time of writing I am considering this a possible trend up day. We'll see how that goes.

Stan and I are doing a free educational webinar after the close tonight on trading using compression and expansion. Feel free to come and I can say with confidence that at a total price of $0.00 this would be the best value TA research you could do today :-). You can register for that here.

As an aside, as part of my project to mention nice calls I make more often, this GC long call I made on the subscriber twitter feed at theartofchart.net an hour ago is looking pretty sweet at the time of writing. If that is the retrace low then the nice target within the wedge is wedge resistance, currently in the 1440-50 area. On one GC contract that's a $13k + move which makes our services there look very very very cheap by comparison. There's another setup on CL this week that may well deliver even more on a single contract. Just sayin'.

Technical Difficulties

Apologies for the late post again today but I have been battling a host of technical issues with Stockcharts, our web hosts at theartofchart.net, and sundry other issues. All sorted out or mostly but all very time consuming. 

Not much to say on ES and SPX here. Volatility is definitely back, and they have been consolidating before what should soon be a push down into the obvious target area. Looking at ES that move may well have now started. ES Sep 60min chart: 

The obvious main target is rising wedge support on SPX, currently in the 2090-5 area. That really should be tested, and I'm expecting that to hold, but there might be a break below it. Even on a break though I'd be looking for a big rally soon after. SPX daily chart:

There are a lot of people looking for a big decline to start directly from here. I'm not one of them as I don't think this topping setup is cooked yet. If SPX rising wedge support is respected then Stan and I are looking for a new all time high ideally in the 2210 area in a couple of weeks before a larger decline gets started. I'd suggest not being short through that move as that could get uncomfortable. :-)

Volatility Is Back and The TNX Patterns

It's been a bit of a bumpy ride since Friday morning, which I can say because I am a master of the understatement, and SPX broke back over my 2148 resistance yesterday, but failed just under the monthly pivot test into a retest of Monday morning's low today. SPX should continue down to at least my weekly punch stat minimum target at 2108, and really should go further into rising wedge support, currently in the 2090-5 area. SPX 60min chart:

RUT has already broken yesterday's low and is coming into the right area for a possible reversal though it too should go a bit lower. RUT 60min chart:

Bonds and SPX have been moving with a strong positive correlation the last few days and bonds have reached a possible short term reversal area here. I sketched in an ideal path on 10yr bond yields (TNX) on a chart from the Trader's Chart Service at theartofchart.net on 28th August and (buffs fingernails modestly) TNX has followed it well since then. The ideal target for the current move and that has been reached today, with some rejection at 17.52. TNX should retrace the entire recent move back to 15.19, and that retracement may now have started. I'm not much on correlations and when I think bonds are going up I just tend to go long bonds, rather than think of shorting SPX. Nonetheless if bonds are bottoming out here then SPX might potentially turn here too.

I've already reversed long on ZB here. ES I'm still watching carefully. TNX 60min chart:

Stan and I did our free public webinar on AAPL, AMZN, FB, TSLA and NFLX yesterday and if you missed that then you can see the recording here.

Downside Targets

Well the bears certainly found their car keys on Friday, and I was pleased to see (buffs fingernails modestly) that ES Dec closed exactly on the double top target at 2114.5 that I gave on Friday morning. So what now?

All charts today done for Trader Chart Service at theartofchart.net at the weekend.

Well obviously it seems very likely that this is the 4%+ retracement that I've been looking for and historically the absolute minimum target that I'd be looking for on SPX here would be a 3.9% retracement into 2108, with the current low at 2119. The obvious target for this move though remains rising support from the February low, currently in the 2090 area, and I'd be surprised if that wasn't tested. Short term resistance is the daily lower band, currently at 2143 but dropping of course, and broken support at 2148. SPX daily chart:

RUT looks similar but I have two obvious targets there, which are the possible H&S support and strong support level in the 1198/9 area, and rising wedge support in the 1165 area. RUT daily chart:

Short term support not as clear on NDX, but if you're wondering whether I think that it is likely that NDX will test that rising megaphone support , currently in the 4335 area, this year, then the answer is that I do. I think this is a topping process for that move and I'm still leaning towards a flat to red 2016 as I called on the first trading day of February on my January stats. You can see that post here. NDX daily chart:

I'm expecting a rally then lower on the indices. I'm mainly watching SPX and RUT here and I'm wondering about a possible match between RUT support at 1197/8 and SPX rising wedge support test in the 2090 area. That might deliver a lower high in the high window in a couple of weeks and shape the larger decline that would likely follow that.

Stan and I are launching our new Big Five chart service this week covering AAPL, AMZN, FB, NFLX and TSLA today with a free public seminar an hour after the close. If you'd like to watch that free webinar you can sign up for that here.

Testing Support and AAPL Revisited

I wasn't planning a post here today but I have more time than I expected this morning, and I didn't manage to do the AAPL post I was planning yesterday, so I'm going to combine them both into a single post here this morning. 

I'm rolling into the December contract over the weekend, so if you've rolled already then I've put the spread between the September and December contracts on each of the ES, NQ & TF charts below. All three charts were done and posted last night for subscribers at theartofchart.net. 

At the time of writing all the key support levels that I was looking for at the time I did these charts are being tested. ES has made the 61.8% fib retrace and is testing the monthly pivot at 2168 (2161.5 on ES Dec). NQ has made the double double target at 4783, and is now testing the monthly pivot at 4763 (4759 on NQ Dec). TF has made the obvious 38.2% fib retrace at 1249/50 (1245 on TF Dec). These are big support levels, and given the timing on the cycle windows I'm expecting a reversal back up to new highs here. 

What happens if support isn't found here? Well ES has a possible double top formed here that on a sustained break below 2155 (2148.5 on ES Dec), would target the 2121 area (2114.5 on ES Dec). NQ has another possible double top setup that on a sustained break below 4750 (4746 on NQ Dec) would target the 4660 area (4656 on NQ Dec), and TF has established support levels in the 1246 (1241.6 on TF Dec), 1226.5 (1222.1 on TF Dec) and 1196 areas (1191.6 on TF Dec). The big target would be the lowest as that is a possible larger H&S neckline. 

How likely is it that we could see an early break down? Well the current degree of compression on SPX is unprecedented  as far as I'm aware, and it gets harder to call moves when you are in genuinely uncharted territory. It's certainly possible that we could see that here, and as I've been saying for weeks, the obvious direction to see that coiled energy released into is a break down. We'll see whether support holds here. If it doesn't I'd be wary of buying the dip and I'd note that today is a cycle trend day, so if support breaks and bears can locate their car keys, this decline could potentially last all day and set up further declines over the next few days. 

I would note that the mini-crash a year ago followed a compression that was considerably smaller than this one. We'll see. Until support is broken with conviction the obvious lean is bullish. If it breaks with conviction then all bull bets are off. 

ES Sep 60min chart: 

NQ Sep 60min chart: 

TF Sep 60min chart:

If you've been reading my blog for several years you'll probably recall that I used to follow some stocks regularly and (buffs fingernails modestly) some of my calls on stocks were pretty impressive. As Stan and I are launching our new Big Five service next week at theartofchart.net, I thought I'd dig up some of those older posts to show that Stan and I, as he has done a lot of work on stocks in the past too, are not in unfamiliar territory with these. 

Browsing through these, some of my favorites are my low call on BP in June 2010 at the time of the big oil spill, you can see that post here. It bottomed the next day I think. Another is my call in January 2011 for GS to drop from $165 to under $100, with it halving in value over the next nine months. You can see that post here. Another is my call in May 2011 that major support had broken on RIMM and looking at a 50%+ drop there, after which it fell almost 90% over the next year. You can see that post here. All of these calls were the sweeter for fundamentalists arguing strongly with me when I made them that these purely technical calls would never deliver for fundamentals reasons. 

As the Big Five service that we are launching covers AAPL, AMZN, FB, NFLX and TSLA though, I'm looking at my past work on AAPL today and I've an example to show that has a relevance here that I'll explain. 

It started with a couple of posts in October 2012, when I did a post talking about the negative divergence on the AAPL weekly RSI 14 and the history of similar divergences on AAPL. You can see those posts here and here.  My point was that there had been five similar weekly sell signals on AAPL over the years, and the smallest decline delivered by the signal has been 15% in 2011, with the next smallest after that being a 42% decline in 2006. This was a controversial post and you'll note that I was sounding a bit defensive on the second one. The subsequent decline into April 2013 was a whisker under 44% and I called the IHS low setup in a couple of posts in May 2013, which you can see here and here. 

What's the relevance to AAPL today? Well you can see that AAPL is once again on a weekly RSI 14 sell signal, and that signal has made the possible near miss target with a peak to trough decline of 31.85% so far. That's undersized as 5 out of the six previous examples delivered declines over 40%. I'd note that rising meghaphone support is currently in the 83 area and that a test of that trendline in the 83.5 area would bring that up to a still undersized but better 36% to 37.5% decline. We are expecting to see that trendline hit, though probably not directly from here. We'll be laying out what we are seeing as the likeliest path to get there over the next few months at our free webinar to launch the Big Five service after the RTH close on Monday, and you can register for that free public webinar here. AAPL weekly chart: 

Going back to SPX/ES, today is an important support test and on a conversion of the monthly pivot to resistance the high that we are expecting in two or three weeks may already be in. This tape is highly compressed and if we see an expansion to the downside start here then the tape could get wild. If that is starting and you aren't already short, I would be very careful and look back a year to see what could happen here if the gap down today becomes an unfilled breakaway gap down. Trade safe. 

I'm out for pretty much the rest of the day. Everyone have a great weekend. :-)

To B Or Not To B

One thing that Stan and I are both bad at is drawing attention to our successes, as that feels like bragging, and we both know that good technical analysts are very prone to getting delusions of grandeur, which has a very negative (and often fatal) effect on the future quality of their  work. We have no intention of going down that road ourselves.

However a certain degree of self-congratulation seems necessary for marketing purposes, so with some reluctance I'm going to be mentioning some current and past successes along with my equity index analysis today just to demonstrate what it is that we do at theartofchart.net. I'm going to be doing a post there later showing some seriously nice past calls on AAPL to promote our new Big Five (AAPL, AMZN, FB, NFLX, TSLA) chart service that we are launching at the moment, and if you'd like to attend the free public webinar that we are doing on Monday after the RTH close to promote that service then you can register for that here.

I posted this NQ chart last night as one of my nightly bonus charts for theartofchart.net subscribers saying that the pattern setup on NQ was favoring a retest of the new all time high and then a fail that on a sustained break below 4810 would target the 4780 area and very possibly the NQ monthly pivot not far below that target in the 4763 area. NQ retested the new ATH overnight and has been trading around the 4810 area for most of the morning so far. NQ Sep 60min chart (from Wednesday night):

Support so far this morning is at the 50 hour MA on SPX at 2176. That needs to break down to open the main backtest targets on ES which are the weekly pivot at 2172 (2172/3 area on SPX) and the monthly pivot at 2168 (2168/9 area on SPX). If seen at all, the bears not having been that impressive lately, then I'd be expecting one or the other to hold as support for a decent dip to buy. SPX 60min chart:

I was talking about the strong resistance trendline on RUT yesterday, and this morning's retracement is coming after RUT closed at the test of that trendline last night. I'm not expecting the trendline to hold as resistance that much longer, but until that breaks it is very much a strong resistance trendline, and all the stronger this morning for yesterday's test and fail there. It is of course possible that it will hold. RUT daily chart:

We've had some lovely calls in our analysis for subscribers so far this month. Just looking at mine for the last couple of days this call below last night on ZB to deliver an H&S target in the 169'26 area delivered nicely, and has continued down as Stan & I were forecasting on Sunday's public Chart Chat of course. Stan was looking for 166 on his video for subscribers last night and it's already about halfway there. ZB Dec 60min chart (from Wednesday night):

On my CL chart last night I was looking at a falling wedge that has broken up with a target in the 47.5 area & mentioning that in my experience these tend to be good performers on breaks up. CL was at 46.14 at the time and the high so far today is at 47.43. CL Oct 60min chart (from Wednesday night):

On Tuesday night I posted the NG chart below looking for NG to test and reverse at channel support in the 2.66 area. NG made the low at that trendline test at 2.665 yesterday, has broken up from the falling wedge shown and at the time of writing has gone as high as the 2.82 area. NG Oct 60min chart (from Tuesday night):

I could post more but don't want to take up more space today. If you'd like to see our call on the GC low last week as well then I posted those charts here last Thursday and Friday I think.

Are we always right? Not at all, but we're right as much as we think is doable without actually being clairvoyant. We reckon on being on the right side of the market 70% of the time or better. Is this service for everyone? No, we are a pure TA site and give no trade recommendations on entries or exits as we (as well as most sites that do offer these trade recommendations) are not licensed to give those. What we do is give high quality forecasts across various markets that people who know how to trade can use to set up some very nice trades. That said we do have a trading system that we teach, and an extensive training library covering a wide range of aspects of practical trading and TA. If you're interested in finding out more then we offer a two week free trial that you can find on this page here. Payment details will be taken at the start, to prevent people taking a string of free trials under different names, but no charge will be made until the end of the free trial if the recurring payment is not cancelled.

Prices for our Daily Video and Triple Play services are going up at the end of September and we operate a policy that prices are never raised for subscribers with continuous subscriptions, so if you are interested, then I'd have a look before prices go up.

I'm seeing a friend for drinks tomorrow at the House of Commons in London so the next post here will be on Monday. She's an honest politician but, I can't mention her name here as, if word of her personal integrity leaks out that could finish her career in politics. Much the same in the US it seems so I'm sure you understand :-). I'll be doing a post on AAPL this afternoon at the theartofchart.net blog, and I'll post the link on twitter when I've finished that.