The Three Bears

I was saying last week that for a fill of the open gap from 2711.93, I’d be disregarding the Three Day Rule target (a retest of 2553.80). The Three Day Rule target technically hasn’t failed yet, but the first downside scenario is likely failing, and we are now left with the remaining two scenarios.

The secondary scenario is that a large triangle is forming here and that SPX is heading towards triangle resistance, currently in the 2745 area. As triangles are to an extent a “Get Out Of Jail Free” card for pattern targets, on a fail, there we would likely still reach the Three Day Rule target, and I’d add this to the other two exceptions when the rule triggered while a triangle was forming.

If we do see this scenario develop then, as SPX moves to triangle resistance, NDX and RUT may reach their IHS targets in the 6945 and 1608 areas respectively.

If SPX breaks over triangle resistance, then the Three Day Rule has had a first fail, and SPX would likely reach that IHS target in the 2792 area. At that point, I’d be fairly neutral on direction, though excepting at least a retracement sometime soon.

Full Intraday Video from theartofchart.net – Update on ES, NQ and TF (at the start) and then DX, CL, NG, GC, ZB, HG, KC, SB, CC, ZW, EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD, and NZDUSD:

SPX 60min chart:

Written by:

Richard Chappell

Jack is a 20 year retail trading veteran and co-founder of The Art Of Chart. He started his blog at channelsandpatterns.net in 2010 and since has published tens of thousands of charts looking at hundreds of trading instruments across most tradeable markets, doing original work mainly in the areas of trendlines, patterns and divergences. At The Art Of Chart Jack has taught trading skills, technical analysis, and the discipline and trader psychology that allow those to be used effectively in trading.

17th Apr 2018

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