Looking at the charts this morning there's little to cheer the bears in the medium to long term. SPX broke above the trading range of the last eleven weeks on Friday, and is close to challenging the last major bear market resistance level on SPX in the 1249-58 area:
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Opex Friday (by Springheel Jack)
We've been chopping round in a range since the high last Friday and momentum is building for a breakout in one direction or the other. As I mentioned yesterday the Euro summit this weekend may well be the trigger for that breakout, and if so then I'm leaning short, as I think the Germans will be most reluctant to commit any new money.
Short term ES is back near the top of the trading range and possible bullish rectangle at the time of writing, and I'm leaning against seeing a breakout today, so immediate upside looks limited. I'm watching the short term support trendline for this move up from yesterday's lows, and if that breaks down I'd expect at least a retest of the 1203.5 support level:
Copper Divergence (by Springheel Jack)
Just a quick post today as it's halfterm now and I'm taking my children out every day and catching up on some admin until the end of next week.
We are consolidating here and after that is finished we will either push up further or drop. The boundaries on ES are clear enough. So well delineated are these boundaries in fact that I posted the chart below on twitter yesterday speculating whether a rectangle is forming on ES. If so then the next obvious move would be a test of Tuesday's lows and a strong bounce there to confirm the rectangle. The stats and targets are on the chart but that would be a bullish setup:
Huge Reversal (by Springheel Jack)
Well that was a real rarity yesterday, a major distribution day on Monday that was followed by a major accumulation day on Tuesday. I posted the following chart on twitter intraday yesterday that showed an large H&S forming that would take ES to the 50% retracement level. It fit the likely reversal scenario perfectly and mid-afternoon yesterday I'm sure a lot of people were playing the expected top of the right shoulder in the 1216.5 ES area. Alas, the news about the French and German massive expansion for a massive expansion of Europe's bailout fund was released and the spike up on the news smashed this lovely short term bear scenario:
Fib Targets and AAPL (by Springheel Jack)
We had a trend day down on SPX yesterday and the daily candlestick was a bearish engulfing candlestick, so it should now be safe to say that this interminable wave up that we've seen from the lows has finally topped out. That candlestick and the trend day are both strongly suggesting more downside in the near future, though the powerful and largely uninterrupted nature of the move up from the lows suggests that this is now a corrective wave that is likely to be followed by another wave up that should beat last Friday's high. I've concentrated on looking at the likely fibonacci retracement levels on SPX, NDX and RUT today, and I've marked those on the chart. Here are the levels on the SPX 15min chart:
