As the entire world knows by now, China joined the rest of the world’s central banks in more “easing”, which sent markets into a spastic move higher. As you can see by this view of the NQ, this massively bullish news has not, as of yet, represented any kind of sea-change in the markets. Before the day was even out (again, in some, not all markets), the entire move up was reversed.
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Here There Be Dragons
Yesterday morning ES tested the weekly pivot at 2035.5, and then SPX tested the 50 hour MA and then SPX was off to the races again. That 50 hour MA has held on five tests out of the last six trading days and until we see a break below it this uptrend is still very much intact. That first break below would normally also precede the main high, so that main high still doesn’t look close here. SPX 60min chart:
In Between Daze
SPX declined modestly yesterday, bottoming out at 2001, just above the 1995-2000 target range I posted in the morning, and has recovered strongly overnight. As I said yesterday I’m not seeing anything to strongly suggest a high here and am looking at trendlines in the 2040 and 2060 areas for resistance. If we see a break below 1992 today I may reconsider that view. SPX daily chart:
BOJ Bombshell
Well we looked very close to a high at the close yesterday but with the gap over strong resistance likely at the open we could see an extension further upwards. On a sustained break over the rising wedge resistance trendline on Dow then we are forming a new pattern that is not yet clear. The same applies on SPX. Dow 60min chart:
The Air Is Getting Thin
SPX broke above the daily middle band yesterday and tested the 100 DMA. More importantly though, the high yesterday was within a couple of points of testing the weekly middle band. Given that today is Friday that may well be formidable resistance today, and while I’d quite like to see a test of yesterday’s high today, I’m very doubtful about seeing a move significantly higher. This is closing resistance, so only the closing price today is important for that. We could see a move somewhat higher intraday. SPX weekly chart:
