The SPX All Time High Retest

At the end of every year Stan and I do a public webinar where we look at the more likely options for price moves on indices, bonds, forex, metals, energies and other commodities over the coming year. At the one we recorded on 30th December 2018 we were asked a question as to what could invalidate the scenario that SPX was in an ongoing bear market and I gave the reply below talking about the important resistance at the monthly middle band in an ongoing market.

Excerpt from 2019 Outlook public webinar recorded 30th December 2018 looking at the SPX monthly middle band in bear markets. :

I followed that up with a post the next day on New Year's Eve (no, I don't get out much) talking more about that,  with the observation that if SPX closed a month significantly back above the monthly middle band on the rally from the low, then the odds would strongly favor a retest of the all time high before any significant lower lows. You can see that post here. I then followed this through into the close back above the monthly middle band at the end of January and since in other posts.

SPX monthly chart:

I was expecting this current swing high to be a lower high under the SPX all time high on the basis of the pattern setup and daily RSI divergences across multiple indices and while yesterday's trend up day hasn't much changed the pattern setup, it did fail the fixed daily and hourly sell signals and apart from the daily RSI 5 sell signal on ES that just survived the RSI spikes, there is now no negative divergence on the daily or hourly charts on SPX, NDX or RUT or associated futures. The odds favor needing some or all of that to be re-established, and to do that SPX will need a retracement and then a higher high, which at this stage would almost certainly require a retest of the all time high on SPX at 2940.91.

SPX daily chart:

There have been a slight modifications to the support and resistance trendlines on the rising wedge on SPX with the latest move up but while wedge support is now once again unbroken, wedge resistance is again being slightly overthrown. I'd note that wedge support and resistance are due to intersect before the end of April, so a high within this wedge should be very close indeed, and I'm expecting the SPX all time high retest this week. SPX 60min chart:

Stan and I are doing a webinar an hour after a close tonight that is the next in our series on trading commodities. We'll be looking tonight at possible trades on copper, oil and coffee. If you'd like to attend you can register for that here, or on our April Free Webinars page.

Topping Is A Process

In my premarket video this morning I was looking at key support and resistance to define what we were likely to see on SPX this week. Resistance I put at the new weekly pivot at 2907.7. ES was opening the week below this and if that held as resistance, then this swing high might be behind us. That has not held as resistance, ES is back above it, at 2910 at the time of writing, and WP is currently holding as support. This opens a very possible retest of the 2019 high and likely at least marginal higher high above that.

ES Jun 60min:

Support is at the always important 50 hour moving average, currently in the 2890 area and strong support through April so far.

SPX 60min chart:

Just below that is the open breakaway gap from 2888.32, tested multiple times since the breakaway gap up on 12th April and holding so far. On a fill of that gap rising wedge support from the March low is now in the 2875 area. SPX 15min chart:

On the bull side I have a strong stat that I called at the start of February, on the break back over the SPX monthly middle band, looking for a retest of the all time high. That doesn't need to be done right now, but obviously SPX is not far away from the all time high at 2940.91. On the bear side the clear rising wedges from the December low on SPX and ES have both broken down, there is negative divergence almost across the board of US indices and a daily RSI 5 sell signal on ES has already fixed.

Stan and I are doing a webinar an hour after a close on Wednesday that is the next in our series on trading commodities. If you'd like to attend you can register for that here, or on our April Free Webinars page.

Roll On The Weekend

SPX has spent the week inching through the topping process, with some progress particularly yesterday and today. Yet another higher high may be needed, as I was suggesting in my premarket video this morning. That is below with an update on ES and the usual 21 other futures charts.

Full Premarket Video from theartofchart.net - Updates on ES, NQ, RTY, DAX, ESTX50, SPX, NDX, RUT, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX, EURUSD, USDJPY, USDCAD, AUDUSD:

On the 15min chart the obvious next target would be wedge support, now in the 2871 area. Current support is the open gap from 2888.32, that has been tested today and yesterday and the next move may be to retest the highs to make a second high of a small double top before that open gap is filled to start the first decent move down. SPX 15min chart:

On the 60min chart there has been an RSI 14 sell signal fixed for a few days. If that was not already the case another would have fixed yesterday. The rising wedge from the December low has overthrown and then rising wedge support broke down slightly this morning. This should be at a late stage in the topping process. SPX 60min chart:

The daily RSI 5 sell signal on SPX that started brewing on the break to a higher high last Friday hasn't yet fixed, but daily RSI 5 sell signals have now fixed on ES and RUT. More should fix soon. SPX daily chart:

One thing I would mention is that NDX made a new all time high this week. Has that increased the chance that SPX will make a new all time high before this next turn down? Yes, I think so, but that's still not the most likely thing to see at the high in my opinion. We will no doubt see next week.

Stan and I are doing a free public webinar an hour after the close tonight on our big five and sectors service. We'll be reviewing AAPL, AMZN, FB, GOOG, NFLX, TSLA, IBB, IYR, XLE, XLF, XLK and XRT. If you'd like to attend you can register for that on our April Free Webinars page.

Either way, everyone have a great holiday weekend! :-)

Stick A Fork In It

On Tuesday I was talking about the likely outcomes if SPX/ES managed either to convert the weekly pivot (2879.50) to resistance or failed in that attempt, and the likely outcome in the event that WP held as support was a full retest of the swing high and likely marginal higher high. WP held as support then and, after a near miss yesterday, the full retest and higher high has been seen today. So where is this setup now?

Well as of the highs this morning all four of the rising wedges on SPX and ES from the December and March lows respectively have now slightly overthrown their wedge resistance trendlines. Hourly sell signals are fixed on SPX and RUT here, and daily sell signals are now brewing on all of SPX, NDX and RUT. This setup looks very ready to turn down here. 

On the ES chart I'm wondering about a possible HOD retest to set up negative divergence on the ES hourly RSI. ES Jun 60min chart: 

On the SPX hourly chart I'd note that the low this week was also at a test of short term trend support at the 50 hour MA. That is now in the 2885 area and a break and conversion of this level to resistance is the first step in any serious reversal on SPX. Watching for that SPX 60min chart: 

Daily negative divergence on SPX was lost on the spike up into the last high. That is now back and I'm expecting this to fix soon and deliver a decent decline into May. SPX daily chart: 

Does SPX have to turn here? Will it be forced to reverse course by the awesome power of my mighty trendlines? Well, that's not really the way these things work, but the odds at this stage heavily favor reversal before we see a retest of the all time high now not far above, though my monthly middle band stat that I called at the end of January does have me expecting an all time high retest this year, very possibly in the summer after a low in May. 

Everyone have a great weekend! I know I will :-)

Looking At Support Levels

This really is one of the most nicely formed trendline highs on SPX/ES here that I've seen in a while and, so far at least, trendline resistance is holding like a champ. As long as that remains the case we should either be starting the first swing down now or, if the weekly pivot on ES at 2879.50 can't be broken and converted to resistance on this test, we would likely need one more high retest to complete a slightly larger double top than the one that has already formed and broken down on both SPX and ES.

The short term setup here is a double top that might be a Janus bull flag. That's a pattern of mine and I haven't yet found time to write a definition page with examples but the short version is that a double top has formed and broken down slightly. At this stage SPX either heads to the double top target, or rejects back into a full high retest. One of those two scenarios should be next. I talked about the setup here and support levels in my premarket video this morning.

Full Premarket Video from theartofchart.net - Updates on ES, NQ, RTY, DAX, ESTX50, SPX, NDX, RUT, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX, EURUSD, USDJPY, USDCAD, AUDUSD:

Having said that, I'd like to reflect on the full beauty of the trendline setup here. The strongest setups are a match on both SPX and ES and that is most definitely the case here. On ES the main rising wedge from the December low has overthrown slightly at this high. Wedge support is currently in the 2840 area. ES Jun daily chart:

The smaller wedge from the March low saw a perfect hit of wedge resistance at the high. Wedge support is now also in the 2840 area. ES Jun 60min chart:

On the rising wedge from the December low on SPX there was a perfect hit of wedge resistance at this high. Wedge support is now in the 2850 area. SPX 60min chart

On the smaller wedge from the March low there was also a perfect hit of wedge resistance at the high. Wedge support is now in the 2835 area. SPX 15min chart:

All these rising wedge support trendlines are currently in the 2835-45 SPX area, and will need to be broken to open the downside.

Stan and I were planning to do a free public webinar of Big Five and Sectors (AAPL, AMZN, FB, GOOG, NFLX, TSLA + six sector indices) after the close on Thursday but my internet connection where I will be on Thursday night might not be good enough so we have delayed the webinar until Thursday 18th April. If you'd like to see that you can register for it on our April Free Webinars page. The connection will definitely be good enough to write a post, so I'm planning the next post on on Friday.

So Here We Are Again

On Tuesday I was looking at the obvious resistance trendlines on SPX that might be hit this week in the 2885-2900 area and I've been watching those since. This morning they have been hit at 2891/2 with a possible hourly RSI 14 sell signal brewing, so this is an important inflection point and possible swing high area. I talked about that before the open this morning and this is the full version below of my premarket video also covering the usual wide array of future and forex instruments.

Full Premarket Video from theartofchart.net - Updates on ES, NQ, RTY, DAX, ESTX50, SPX, NDX, RUT, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX, EURUSD, USDJPY, USDCAD, AUDUSD:

On the 60min chart the rising wedge resistance hit is pattern resistance for the move up from the December low. We currently have a precise hit of the trendline but there is always a possibility of a bearish overthrow of course, so SPX could go a little higher. SPX 60min chart:

The hit on the smaller rising wedge resistance trendline from the 2722 low is equally precise, but equally  could overthrow. SPX 15min chart:

In terms of negative divergence there are already SPX daily (weak) RSI 14, hourly RSI 5 and 15min RSI 14 sell signals fixed, with possible weekly RSI 5, hourly RSI 14 and 5min RSI 14 sell signals brewing here. This would be a great place to see the turn. we shall see. :-)

Stan and I are doing our monthly free public Chart Chat on Sunday afternoon. If you'd like to attend you can register for that on our April Free Webinars page. Everyone have a great weekend!

Topping Options

The short term resistance on the SPX 5dma and hourly RSI 14 that held for much of last week eventually broke and delivered the high retest and marginal higher high that I was looking for in the event of that break. So what now?

Well I'm expecting this to be the second high of a double top or possibly making the head on an H&S. 15min sell signals have fixed on SPX and an hourly sell signal has fixed this morning on ES. This high could already be in, and the rising wedge on ES from the last low has now broken down, which is promising. A small double top has broken down slightly towards a possible H&S neckline in the 2854 area, and there is now a substantial double top in place which on a sustained break below 2789 would look for alternate targets in either the 2728 or 2706 area.

ES Jun 60min chart:

However I would note that there is at least some reason to think that SPX/ES might need to go a little higher. There is currently no negative divergence on the SPX hourly RSIs and if we were to see a retracement here followed by a higher high, then I have a potential trendline target on SPX in the 2885-2900 area, depending on the time taken to reach those trendlines. On SPX  this last retest could obviously fail on a very marginal higher high, but if not then the next target higher looks like those trendlines.

SPX 60min chart:

The 15min RSI 5 sell signal on SPX has now reached target but the RSI 14 sell signal is still open and I'm expecting to see at least some more downside even if this is just a retracement. The ideal rising wedge resistance trendlines on these SPX charts are both currently in the 2890 area and the wedge on the SPX 15min chart below is a lower degree wedge part of the larger wedge on the SPX hourly chart above. Stan has also identified this area as a fibonacci target area. We shall see.

SPX 15min chart:

We delayed the Trading Commodities (Setups and approaches) webinar that we were going to do an hour after the close last Wednesday to an hour after the close tomorrow. If you'd like to attend then you can register for that on our April Free Webinars. We are also doing our monthly free public Chart Chat on Sunday and you can register for that on the same page.