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I have a “moment of truth” every morning when I grab my iPad, bleary-eyed, from the side of the bed, to see what the ES is doing. This particular morning, I was bracing myself for +30 on the ES considering the Clinton momentum, but, happily, it’s only up 3 measly points at the moment. More important to me, crude oil is getting its shiny black bottom spanked, down about 2.7%. Some ridiculous rumor should be along any moment now.
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:
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
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:
Last week, I noted that I can become aggressively bullish again should we see a clear 5 wave structure complete off the recent lows. While I can make a colorful attempt at classifying the recent rally in the metals complex as a 5 wave structure, I have to be honest in my analysis and state that, to me, it did not look like a clear 5 wave structure. So, the immediate bullish count will only be an alternative to me at this time, which the market will have to prove to me.
That means I have moved into the current market action representing a wave ii in the larger GDX count, whereas silver and gold still seem to present as a wave 2 in wave iii. However, should the GDX be able to strongly break out impulsively over the recent highs, then I will view everything in the heart of a wave iii higher. This is my simplified perspective.
