- WE'RE JUST RANDOM SPECKS OF DUST IN A TORNADO TO THE MARKETS .......
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Thursday, 14 February 2013

Direction Uncertain

I was saying last week that if we saw a break over resistance on SPX then we would most likely see failure not far above and I'm still thinking that. As I said then, the break above has not compromised the clear negative RSI divergence on the SPX daily chart. I've left last week's text on the chart below but middle bollinger band support is now at 1502, and lower bollinger band support is now at 1476. This is a setup suggesting strongly that we are in the topping process for a short term high, though as I also said last week, that could still run to 1535 or so without compromising the negative RSI divergence on the daily chart:
On the 60min chart there is a real possibility that a small H&S is forming at broken resistance at 1515. If a real retracement gets going the obvious target would be rising support from November in the 1460 area:
ES retraced strongly overnight to retest the 1511 support area. Short term resistance is in the 1516.5 area at the 50 hour MA and I'm wondering about a possible H&S forming that I've sketched on the chart:
AAPL hit falling wedge resistance a couple of days ago and has retraced from there so far. There's really a very nice technical case for the current low on AAPL being the low, so I'm still leaning bullish on AAPL unless we see a break below decent support in the 460 area. If we do see a break below there I'll be considering a double-bottom scenario:
EURUSD reversed back down strongly yesterday and I'm watching to see whether support in the 1.33 area holds. We may be seeing a double-bottom form here, and if so, the target would be back at the current rally highs:
I mentioned yesterday morning that the chances that CL would reverse at the previous highs were higher than normal and CL reversed strongly at the test of the highs and is retesting 97 area support. I have two possible patterns forming here, a bearish double-top targeting 92, and a bullish rectangle targeting 101. Both of those would suggest another test of 95 area support so we may well see that here:
Leaning cautiously bearish here on equities as long as ES can hold below the 50 hour MA in the 1516.5 area on an hourly closing basis. 

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