- WE'RE JUST RANDOM SPECKS OF DUST IN A TORNADO TO THE MARKETS .......
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Thursday, 3 September 2015

Resistance Levels

SPX is still in the inflection point I was looking at yesterday morning and closed yesterday at declining resistance from 2096 and slightly over the 50 hour MA at 1945. SPX has broken well above both at the open. The setup for today should be as follows.

On a fill of the opening gap at 1948.86 and sustained trade below there I'd be looking for new lows, which should confirm on a break below Tuesday's low at 1903.07

On a break above the ES monthly pivot at 1969 (resistance at globex high), approximately at 1971/2 SPX, and conversion of that level to support I'd be looking for a move to the 2030-40 area, confirming on a break over the current rally high at 1993.48. SPX 60min chart:
The other level to watch is the 5 day MA, which closed yesterday at 1962 and is now at 1957. Bulls need a daily close above it. After that we will go back onto the 5DMA three day rule. SPX daily 5DMA chart:
I'm leaning short here unless bulls can convert 1971/2 as support. It could go either way here though & I'm thinking 65% odds bear scenario and 35% odds bull scenario.

Wednesday, 2 September 2015

Two Clear Options Here

SPX made my double top target yesterday, overshooting by just a few ticks before bouncing hard overnight. There are two clear options here, both ultimately bearish, and we should see which option we will be taking today.

The more bearish and more likely option in my view is a rally backtest of 1950 area resistance. the key resistance levels here are the 50 hour MA at 1944, declining resistance from 2096, currently in the 1955-60 area, and (daily closing basis) the 5 day MA, which closed yesterday at 1960. as long as these can hold as resistance then I'll be looking for the next move to be the retest of the October low in the 1820  area.

The more bullish option in the event that SPX breaks over resistance here is a rally continuation into the 2030-40 area and fail there. I'm not thinking that is particularly likely here but there are merits to that retest and we could see it. I'm giving it 30% odds here. SPX 60min chart:
Unnoticed by most the monthly middle band broke at the close on Monday and opened up a strong target at the monthly lower band, currently in the 1838 area and a good match with the more bearish option here. SPX monthly chart:
If we see my more bearish option play out here then I would again ideally be looking for an AM high that dies. We could see a choppy inside day today.