SPX retested the high and has made a new all time high with enough confidence that I am looking seriously at the next trendline target in the 2318 area. This is the resistance trendline on the rising wedge from the start of January. SPX 60min chart:
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Jack In The Box Target Reached
Yesterday was clearly a good day to introduce my new Jack in the Box continuation/flag pattern. The double bottom broke down slightly and has then reversed back into a full test of 2299.40. The full ATH retest at 2300.99 is VERY close and should be tested today if we are going to see that full retest. SPX 60min chart:
Working Title
I mentioned the somewhat bearish opening setup on SPX/ES yesterday morning and that’s still looking somewhat bearish. On the bear side on SPX, though the hourly RSI 5 sell signal has now reached target, a small double top has broken down with a target in the 2276/7 area and that could be the target today. On the bull side though …….
Stan & I are starting work on the book we are writing and Stan and I both have a few pattern setups to name as we write them up for the book. One of those for me is double tops and H&S reversal patterns that break support and then fail into trend continuation. These tend to fail hard into a high probability target at the top of the failed pattern (at highs, vice-versa at lows). These happen a lot and longer term readers will recall me mentioning these many times over the last few years. My working title for these as continuation patterns is a ‘Jack In The Box’ Continuation. We may well have one of those here and, if so, that would set up the full all time high retest that we are expecting this week.
New ATH on Nasdaq 100
I had fixed 60min sell signals yesterday morning on ES and TF, and a weak RSI 5 sell signal on SPX. The TF signal made target but I’m wondering if SPX and ES will need a bit more retracement today. If so I’ll be watching the 50 hour MA at 2284 and the open gap into 2280.85 for support. On the upside rising wedge resistance is now in the 2312 area. SPX 60min chart:
Probability Spectra
This is an important week on equities with likely highs coming on SPX, NDX & maybe RUT too. This high will likely last several months. There are couple of questions that I am still getting regularly that I’d like to address at the start of this week.
How certain are we (Stan & I) that our scenario will deliver here? We are not certain at all, because there is precious little certainty in the universe and none at all in the markets. We have a high level of confidence, within the obvious constraint of the reality that we are forecasting with math rather than magic. Our working assumption is that certainty in market forecasting is less common than unicorns, and that analysts offering certainty are either charlatans or delusional. On planet Earth everything is on a spectrum of possibilities.
