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Thursday, 2 July 2015

The Long Kiss Goodnight

Well that was an unusual day yesterday, with the tape buffeted on and off all day by news. Statistically July 1st is the most consistently bullish day of the year, but the bears dominated the day, but without managing to negate the double bottom setup and conceding a strong close to the bulls.

The constant news bombs reminded me powerfully of 2011 when the news was also mostly about the same mess in Greece of course. If an agreement can be put together this time as well to keep the Greeks in the Euro for the moment, then perhaps we can look forward to the same again in two or three years. Who can say?

The main thing that the bears failed to manage yesterday was to test the daily lower band at 2060, and that being the case, there is now a possible target at a retest of the daily middle band at 2096. With the double bottom target at 2092/3, and open 60min and 15min buy signals, that means there is a credible setup here for a big rally to those levels today or Monday, with the caveat that the stats for today are almost as bearish as yesterday's stats were bullish. SPX daily chart:
The important support level to watch today is rising support from the lows at 2071. A break below would weaken the rally case here and open up a test of the daily lower band, and a test of that would resume the daily lower band ride. Above there is declining resistance from the highs in the 2081/2 area, and a break over that would open up the double bottom target at 2092/3 and the daily middle band at 2096. SPX 15min chart:
Hard to say what volume will be like today going into the holiday weekend, and as ever this week, watch out for news bombs. Everyone have a great weekend. :-)

Wednesday, 1 July 2015

Greek News Rollercoaster

More greek news overnight and at the moment SPX is trying to gap up 18 handles or so. Where the open is exactly today is very important as SPX retested and failed twice at the broken H&S neckline yesterday. If we see a gap up over that level at the open this could well be a gap up over resistance, and as long as 2073/4 is then respected as support then SPX is is free to play out the double bottom that with the opening break will have triggered with a target in the 2093 area, with declining resistance from the high currently in the 2092 area.

There is a strong resistance zone 2095-2105 and this rally  could get SPX close to the bottom of that zone. SPX 60min chart:
The SPX daily middle band is currently at 2098, near the middle of the 2095-2105 resistance zone. The daily lower band is currently at 2062 and would need a test today if the lower band ride down is to continue. SPX daily chart:
I have the SPX on a 60min buy signal here and a strong rally on a gap over resistance today looks very credible, subject to more news of whatever type about the greeks. As long as 2073/4 holds as support then I would be looking for a move to 2090-5 and a possible test of the 2095-2105 resistance zone. If 2073/4 doesn't hold as support this rally may well just fade away as suddenly as it has appeared. An announcement that the greeks have cancelled the referendum could spike the market up hard. A credible announcement that the referendum will be proceeding regardless may spike the market down hard.