A Load of Bull

I was hearing a lot of comments yesterday about how the current bull move is unstoppable on every timeframe, and that we could only see a pullback when every last bear had capitulated. What garbage. Nothing goes up in a straight line, and every trend has pullbacks. They may be shallow but we will see them. It may well be that those pullbacks will just be deeper dip buying opportunities but they will come. I don't see much to suggest that a major top is near here, and I'm leaning bullish into May, but there are always some bumps in the road. As far as I'm aware there are also no recorded historical instances of every single bear capitulating on any bull run in a free market, so I would advise against anyone holding their breath waiting for that here.

While we're waiting for the next retracement the last 24 hours was very mixed technically. On the bull side TRAN broke the February high yesterday, breaking the short term dow theory non-confirmation by confirming the new highs since February on Dow. There is a still a larger scale negative divergence of course until TRAN breaks the 2011 high there. For the moment this was not a break with confidence:

IWM also broke over the February high, this time with some confidence, If the breakout can be sustained then the obvious target and resistance is in the 87 area:

My four month resistance trendline on SPX finally broke yesterday, after showing some signs of wear on Friday. This is a two edged sword from a TA standpoint. If the breakout can be sustained it is a strongly bullish break. If it is reversed quickly it is a rising wedge overthrow, and suggests that rising wedge support in the 1365 area should be broken on the next swing down, with the obvious target then being the March low and rising support from October in the 1340 area:

The ES action overnight is suggesting that the SPX break up yesterday may well be a rising wedge overthrow, as ES has now broken the rising support trendline from the March low. Strong immediate support is in the 1393.5-5 area, and an H&S may be forming. If so we may see a move back into the 1403-5 area today to retest broken support and make the right shoulder for that H&S:

The last equity chart for today is on QQQ, where a nice looking rising wedge has formed since the March low. You can see the trendlines will meet in the next couple of days, so a breakout either way is close:

I had mixed feelings about bonds yesterday and I still have mixed feelings about them. Bonds broke down from the double bottom yesterday and aren't far from my next target at 108.4 now. On the other hand TLT is showing marked positive divergence on the 60min RSI now from an extreme oversold reading, and we might see this bounce very soon. Immediate resistance is at broken channel support in the 111.25-50 area:

I still have mixed feelings about EURUSD as well, but it is at the least currently in a short term uptrend. Rising support from the last low is in the 1.311 to 1.312 area and I'm looking for support there today. A break below there would suggest a test of the recent lows:

At the risk of being burned at the stake as a fed-denying heretic in the current hysterically bullish atmosphere, I'm seeing the support trendline break on ES as a real sign of weakness. Strong support as I said is in the 1393.5-5 area and the low overnight so far is at 1394.25. I would like to see a bounce there into the early 1400s to retest broken support and form the right shoulder on a small H&S. If we do see new highs today I'd be surprised to see them exceed yesterday's highs by much, and that should then deliver something I would like to see here, which is negative divergence on the ES and SPX 60min RSIs. The gap fill on ES is at 1404 today.

Equities Still Testing Resistance

We've been testing resistance on equities for three days now, and they may go higher, but unless we see some definite resistance breaks, this looks increasingly like topping action to me. The key trendline to watch in my view is the rising support trendline on ES from the last low, hit overnight and currently in the 1394 area. I have rising resistance trendlines in the 1404 and 1410 areas today if we see more upside:

On SPX my strong rising wedge resistance trendline was showing slight signs of wear on Friday, but is still holding more or less:

On TRAN the February high is still holding as resistance, a break up through this with any confidence would confirm the new highs on Dow and suggest extension upwards, but while it holds this looks like topping action short term:

On IWM, the RUT ETF, the February high is also still holding as resistance, and as with ES, SPX and TRAN, negative divergence on the 60min RSI is arguing for some retracement here:

On Vix there was a wild day with a new low on Friday, but the thing I took away from the day was that Vix opened and closed within the daily bollinger bands, and the overall setup still looks bullish for Vix and possibly therefore bearish for equities, though that hasn't always been a given lately:

I'm in two minds about bonds short term here. On TLT we are still seeing consolidation under broken declining channel support in what may well be a bear flag. On ZB the setup looks more like a double or W bottom, needing a break over 137 to target a bounce to the 138'15 area. We'll see how that goes today:

I'm also in two minds about EURUSD short term here. There was a strong bounce at the end of last week to retest the broken rising channel and that may still be bearish, but there is also a possible
IHS forming there which would not. We'll probably see at least some retracement from 1.319 resistance and the key for me is whether EURUSD can break over 1.32 with any conviction. If it can then we may well see a run at the recent highs:

Overall I'm leaning slightly short today, but am watching that rising support trendline on ES for a signal that we may be topping out short term. Stats are from Danny at Mr Topstep today and they are that the week after March quadruple witching has been down 15 of the last 24 on Dow, though up 6 of the last 8. March quarter end historically gets weak going into the end of the month and has taken some large hits in the last 3 or 4 days.