Decision Time

The three levels that I was watching on Friday for resistance on SPX were all tested and held. The lowest of those levels are the 5dma, currently at 2379/80. That was broken intraday but SPX returned to close on it. The next level is the 50 hour MA, currently at 2385/6, and then the daily middle band, currently at 2389/90. SPX is currently over all three but needs to sustain the breaks to open the retest of the all time high.

The pattern setup leans bearish and hourly sell signals are now brewing on all of SPX, ES, NQ and TF. If bears can break back below the ES monthly pivot at 2366 then we'll be expecting lower lows with an obvious next target at possible double top support at 2322 SPX.

If bears can't get traction today and SPX holds these potential resistance breaks then the obvious next target would be the all time high retest. Today and tomorrow are cycle trend days so wherever this is headed, it may well be a fast journey. SPX daily chart:

The ES and NQ futures charts below were done before the open for Daily Video Service subscribers at theartofchart.net. If you are interested in trying our services a 30 day free trial is available here.

On ES a possible 60min sell signal is brewing and the AM high so far may be the second high of a small double top. The key support levels are weekly pivot at 2377 and then monthly pivot at 2366. These are the key levels that need to be broken and converted to resistance to open lower lows. ES Jun 60min chart:

On NQ a possible 60min sell signal is brewing and the AM high so far may be the second high of a small double top. The key support level is weekly pivot at 5644.25. NQ Jun 60min chart:

On TF a possible 60min sell signal is brewing and the AM high so far may be the second high of a small double top. The key support level is possible double top support at 1362.50 on a break back below the weekly pivot at 1369.70. TF Jun 60min chart:

This is a nice setup for a fail here, if bears are up to the job. We should see whether they are this morning. If the all time high is retested that may well be the second high of a double top.

Stan and I are doing a free public webinar at theartofchart.net an hour after the close on Thursday on Trader Psychology in the second of our Managing Risk webinars, and if you'd like to attend then you can register for that on our May Free Webinars page. The video for last week's Big Five webinar is also posted there. I would also note that this week's edition of The Weekly Call is posted and that the model portfolio there is up 178% over the last six months, looking well on course to make our target minimum 200% return over the first year. As and when that target is reached we're thinking of making the strategy there a bit less conservative. That's a free weekly service and if you trade futures I'd suggest adding it to your reading list.