The SPX Broadening Ascending Wedge

Most days recently I've been posting a rising channel from the 1536 low, and I posted on twitter yesterday that channel resistance was hit at 1684.6 and there was leeway for a push through to 1685/6. I was frankly irritated when SPX then reached 1687.18, which was a clear breach of my channel resistance trendline. 

I have commented before though that sometimes we see a pinocchio through a smaller pattern or channel trendline to reach a target trendline on a larger pattern, and with that high yesterday the pattern from the November low has finally been clarified. That pattern is a perfect broadening ascending wedge, and you can see that on the SPX 60min chart below:

That being the case, the obvious target for a retracement here is the wedge support trendline in the 1580 area. I would also note that the SPX 50 DMA is now at 1588, the daily lower bollinger band is now at 1569, and there are major broken resistance levels at 1576 (2007 intraday high) and 1597 (rising resistance from 2000 high). There is therefore a major support cluster around the wedge support trendline, and we may well see a reversal there to test the highs and set up a larger double-top for a bigger retracement:

ES has broken back below yesterday's low overnight, and I'm running two main scenarios here. If SPX opens at or above yesterdays 1648/9 area low and can hold above it I'll be looking for a right shoulder to form on the SPX chart with a move to the 1660-5 area today. the ES 50 hour MA is now slightly above 1660 and I wouldn't like to see a break back above that with confidence. If SPX open much below the 1648/9 area then I have a possible though extremely ugly H&S already completely formed on ES and that would have a target in the 1605-10 area:

On CL I've been posting the candidate double-top there every day this week and that is reaching the point of decision. If CL breaks below it then I'll be expecting a move to under 86 after that break to maintain the lower highs and lows on the bigger picture charts:

I've been saying regularly that I think the greater trend on bonds is down, and that the bull market from 1980 on bonds may have ended, and I'll show another chart to support that this morning. That chart is the TNX (10yr Treasury Yield) monthly chart from 1980 and you can see the very strong support trendline that was hit for the fifth time in mid 2012 to start the current bounce. That may or may not be the end of the multi-decade bull market, but we'll have to see whether rates can get over 4% to confirm that. I've been reading quite a few comments that this multi-decade bull market ended on April 29th this year and I've no idea why that is. If that bull market has ended, it plainly ended last summer:

What I'm looking for on ES today is already stated above so I'll just repeat that here - ES has broken back below yesterday's low overnight, and I'm running two main scenarios here. If SPX opens at or above yesterdays 1648/9 area low and can hold above it I'll be looking for a right shoulder to form on the SPX chart with a move to the 1660-5 area today. the ES 50 hour MA is now slightly above 1660 and I wouldn't like to see a break back above that with confidence. If SPX open much below the 1648/9 area then I have a possible though extremely ugly H&S already completely formed on ES and that would have a target in the 1605-10 area:

No Shorts Tuesdays

Yesterday was up yet again and I have been reading that the last twenty five or so Tuesdays have all closed in the green. That's not true on SPX, as that dropped 4 points on Tuesday 19th March,  and another four points on Tuesday 12th March, but the run of positive Tuesdays has still been impressive.

There is still negative divergence on the 60min RSIs on ES and SPX, though it's hard to get excited about that while ES is holding above the 50 hour MA, now in the 1665 area. If that should break we may see a move to test rising support on ES from the 1531 low, and that's now in the 1650 area:

On SPX we saw a marginal higher high yesterday on increasingly negative RSI divergence. That looks promising for retracement and I have support on this perfect rising channel on SPX in the 1650 area:

Will we see some retracement here? A small one certainly looks promising from the COMPQ chart where a rising wedge is breaking down, again on increasing negative 60min RSI divergence:

Not much to add to that on equity indices today so I'll move on to other things. First up is the AAPL chart, which looks guardedly bullish here, with the bullish falling wedge broken up and retested, and now a very promising IHS forming at the low. If AAPL can make a higher high over 463 then we should see a bounce back into the 500s. The IHS target would be in the right area to test the 200 DMA, now at 527.71:

Next up is gold, where I have been looking at two trendlines on the weekly (LOG) chart. The first is being tested and could hold, though I'm not expecting that. The second runs from 2001 and is a better prospect, and that's now in the 1050 area. if the first trendline breaks I'll be expecting a move to the second over the next few months:

I'm posting the CL chart today mainly to show the possible double top there on the July futures. Not much has happened there since yesterday morning:

The last chart today is the EURUSD chart, where in addition to the large H&S almost formed there at the moment I would also point out the upsloping H&S that broke down in late 2011. The rally from last summer and failure at 137 could have been a retest of that H&S neckline. I have to say I don't like either H&S, as they both started earlier in the preceding trend than I like to see, but the support trendline on the overall falling wedge from 2007/8 is now in the 110 area, and if EURUSD can beat the 2012 low then I think that we may well see that hit over the next year or so:

ES is kicking around the 1670 area as I write, and has held the 50 hour MA on the last small retracement. I'm not holding my breath for a break below 1665, but if we see that the established support levels are in the 1660 area and at rising support in the 1650 area.