I was out for the first half of the session and was very pleased to see (buffs fingernails modestly) that DX and ZB both bounced at the support levels I had said must hold for the bear scenario. Overnight ES has fallen hard into a potential short term double bottom in the 1192 area and is now close to the 1185 level that I've been talking about as main support on ES. Here's how that looks on the ES 60min chart and I would draw your attention to the short term falling wedges confining the current downtrend. Those are suggesting that we may see a strong bounce in the 1185 area later on, and I have noted the wedge resistance levels on the chart:
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Many Triangles Break Down (by Springheel Jack)
Today's post will have to be short as I'm going out soon and will be out for most of the day. I have to be out most of Monday morning as well so Monday's post may also be short.
Obviously the symmetrical triangle broke downwards yesterday and broke down hard enough that I think it is unlikely to be a false break. This is disappointing from a probabilities perspective, mainly as these triangles are poor performers on downwards breakouts, with only a 48% chance of reaching the target in a break down. That statistic is in a bull market and Bulkowski hasn't even given a statistic for these in a bear market as they don't qualify as a high probability pattern in either direction in a bear market. You can see Bulkowski's page on these here.
Bonds Cross This Line=Laissez Les Bons Temps Rouler
Triangle Support (by Springheel Jack)
This is one of those irritating mornings when the markets move rapidly while I'm preparing my post. We had a nice looking bull setup on ES earlier when I capped the chart below, with positive divergence on the 60min RSI and a nice test of triangle support. Since then ES has moved lower to test 1220, the triangle is breaking downwards, and any positive divergence on the 60min RSI is now very muted. We need to see how this opens today but right now this is looking bearish:
TF has been outperforming ES in recent days and is not yet close to triangle support. I'd be inclined to give any move on the ES triangle more weight however:
Triangles and the Euro (by Springheel Jack)
I have an analyst friend who's kind enough to give me his view on EURUSD every so often. He's an EW chartist mainly and though I know a lot of people have little time for EW, it is a tool like any other. In the hands of the inexperienced it is treacherous and ambiguous, and in the hands of a master it can be very impressive indeed. This friend of mine is in the latter category. He called the late 2009 high on EURUSD, and when I was in correspondence with him a year later he called the early 2011 low in the 1.29 area as well, adding at the time that he was expecting the following move up to top out in the 1.46-1.47 area. He was right on both counts again and when he talks about EURUSD I always listen very carefully to what he has to say.
His current comments are extremely interesting. I had sent him my possible H&S on EURUSD with the target in the 1.275 to 1.28 area and his reply was as follows:
