Still Minding The Gap

SPX is still testing the open island top gap from the March rally high, and that has been solid resistance so far. My lean is that SPX will likely break up through that within a day or two, but there is now a clear alternate downside scenario shown on the SPX hourly chart below. Partial Premarket Video from – Update on ES, NQ and TF:

The downside scenario here is a possible nested double top setup. A possible hourly RSI 5 sell signal is brewing and will fix on any significant further downside. In terms of the pattern setup the first serious support is rising channel support now in the 2726 area. As it happens the smaller possible double top support is also at 2726, and on a break below the first double top target would be in the 2710 area. That is a decent match with possible trendline support on ES is the 2712 area. The larger double top support is at 2701.9, and a sustained break below would look for 2661.5.

On the downside scenario, with ES and SPX trading at roughly the same level at the moment, support on the way is at the weekly pivot at 2718.9, and the daily middle band, now in the 2688/9 area. 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 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.

22nd May 2018

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