Seven Percent And Counting

I was looking for a decline of more than 5% from the high on SPX to signal that the market was normalizing into a more two-way trading environment, and that has been hit today, and then some. On the video below, I was noting the large amount of positive divergence on various charts and liking the odds for a rally that has not yet materialized, with SPX punching 1% below the daily lower band at the LOD so far.

This is impressive stuff, and the advances/declines level today is suggesting that we may see a repeat of Friday afternoon with a close at or near the low. Intraday Video from – Update on ES, NQ, and TF:

Are there lower targets that are opening up? Yes. RUT broke the first support trendline today and that opens a strong target at the next trendline support now in the 1470 area, bracketed by the yearly pivot at 1476/7 and the 200dma now at 1460. We should see a decent rally soon. After that, we likely will need another leg down. RUT daily chart:

Stan and I did our free monthly Chart Chat at yesterday. If you missed that, you can see the recording on our February Free Webinars page.

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 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.

05th Feb 2018

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