A Strange Start To June

June is not a bullish month historically on SPX, but it does have some bullish leaning days. Today, the second trading day of the month, is historically the strongest day of the month, with 76.2% green closes on SPX. Yesterday runs equal with Tuesday 15th June for second most bullish day of the month with 66.7% green closes.

Now these don’t always deliver by any means, as if they did the averages would all be 100%, but in a setup where there is obvious unfinished business above at the retest of the all time high on SPX, they generally would, so it is interesting that as the second trading day of June draws towards the close, there is little sign so far of the bulls showing up for work.

Just to review the overall position here. SPX is in a high quality rising wedge from the March 2020 low. Wedge support is currently in the 4110 area and wedge resistance currently in the 4310 area. The next obvious target is a retest of the all time high on SPX, and if SPX continues higher then the next trendline resistance within that rising wedge is that rising wedge resistance, now in the 4310 area, and rising of course.

SPX 60min chart:

On the daily charts on SPX (and Dow Indu) there are daily RSI 14 sell signals fixed, but I’m expecting those to make target after the swing high for the current move is made, and that is likely still a few days away. In the meantime the main short term support is at the daily middle band, currently 4170 area, and the monthly pivot at 4166.

I am wondering whether we might be about to see a test of that support, and there is a setup here that might deliver that.

SPX daily chart:

I am showing this setup on ES , but there is a similar H&S on SPX that on a sustained break below 4197 would look for a target in the 4160 area. Both H&S patterns are close to completing the right shoulders and breaking down. If they do, then there is an inflection point where either the tape can continue down towards the target, or reject back up into another all time high retest.

After the break down, a subsequent break back over the right shoulder high at 4217.36 would fail the H&S and set up a strong target back at this week’s high just under the all time high.

Either way, from the historical stats, the obvious time window to see the next swing high is in the week leading up to triple witching on Friday 18th June, as the week after that leans strongly bearish.

ES Jun 60min chart:

As I have a rare visitor up for lunch on Sunday we have delayed the free public Chart Chat for June until Sunday 13th. I’ll be posting the links once we schedule that.

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.

02nd Jun 2021

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