Before the open this morning I was cautiously predicting that ES would rally today to a higher high than yesterday, ideally failing today at a high in the 2865-9 area. As it happened the low of the day was happening at the time on ES, slightly before the RTH open, and ES is now testing yesterday’s high. So far, so good.
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The scenario I was looking at then and now was a modest higher low and then a modest higher high to form a bear flag channel into a test of declining resistance from the highs on SPX. I have tentatively marked an X on the SPX 5min chart the ideal time and level for SPX to top out today and we’ll whether that delivers exactly in the next hour or so. If not there is some wiggle room.
SPX 5min chart:
On the hourly chart I show the overall falling megaphone forming from the high so far. Declining resistance and the 50 hour MA are effectively the same resistance area at the moment.
SPX 60min chart:
In the event that declining resistance and the 50 hour MA are broken and converted to support, which is possible but not looking particularly likely at the moment, then resistance higher is at the daily middle band, currently 2903 area, and the monthly pivot at 2914. SPX daily chart:
An hour after the close tomorrow Stan and I are doing our free monthly public webinar on big five and sectors, covering AAPL, AMZN, FB, GOOG, NFLX, TSLA, IBB, IYR, XLE, XLF, XLK and XRT. Given the current market action that should be pretty interesting, and if you’d like to attend you can register for that here, or on our May Free Webinars page.
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.