Broad Market Rally

Once we broke the downtrend (BLUE LINE) we rose up until the 2:00 FOMC minutes. There was some confusion after the minutes were published, but once the martket found some footing it continued to rise to an all time record close. It's likely we will continue the Fibonacci retracement 100% up to 1532.50 and are likely to continue higher today as we have open territory from here. If we do pull back to digust the huge gain yesterday we'd look at 1526.50 as our first level of support which is the 78.6% Fibonacci line and a point where the price spend a little bit of time yesterday.

SPX Breaks 5 Day Downtrend on 15m Chart

As you can see with the 11:30 bar we broke and held above the BLUE downtrend line. We'll now watch so see how the GREEN line supports as we get closer to the FOMC minutes 2:00pm EST. Watch for similar breakouts on the other indices we just talked about.

Wedge Action on the SPX, RUT, NDX, INDU

The past 5 days of trading have created some wedge-like formations on the 15m charts. I've posted all four so you can see some key pivot areas we're about to run into. In all cases the BLUE line is the downward trend that is acting as resistance. The GREEN line is the uptrend and SHOULD act as support on those indices that are likely to hold an uptrend. A break above the BLUE that holds will confirm a break of the downtrend and will initiate a new uptrend as long as it can hold the GREEN line.

SPX 5 Day 15m



NDX 5 Day 15m



RUT 5 Day 15m



INDU (DOW) 5 Day 15m

Holding at 1510

We actually opened up at 1510 and held that and went up close to our green line on the first 15m bar. The second 15m closed above the GREEN line (uptrend on the 15m) we talked about yesterday so bias thus far is sideways to up. Next key trendline to watch is the BLUE downtrend line of the 15m. If we can break and then hold above 1517.50, we might look for a first target of 1521.50. If we can't break above the BLUE than I'd look for 1510 to support again. Notice that this morning we did not close a body below yesterday's bottoming tails.

SPX Set to Open Down 8.50

The Chinese news has affected the futures more negatively then when I posted last night. We're set to open at about 1509, well below the green line we talked about last night. We'll be looking for our first support level at 1505.

The China vs. FOMC Tug of War or Exit Door?

Tomorrow we are certain to have a fun filled trading day. With the Chinese Market down over 6% at the time of this post and the FOMC publishing their minutes at 2:00pm EST we have the makings of some great potential fireworks. So far futures are down 5.25 on the S&P so an open right now would put us at 1513 which is below the 15m uptrend we started at Friday's bottom. If we hold and close the first 15m bar above that trendline (the Green one), then we could see some more chop until the FOMC minutes. At that point beware of a knee-jerk one way or another. Once the direction is confirmed, have fun. If we open lower and can't close the first bar above the Green trend then we have some likely support levels below -- 1514 has some good horizontal support, 1511.50 is the 23.6% Fibonacci, 1510 has good horizontal support, 1505 was Friday's low, 1500 is parked on the Daily Chart 30MA and was support prior to our last short term uptrend. Not much below 1500 until we hit 1492.50 so be careful there. On the upside, if the market decides to blow off the negativity in the Chinese markets AND likes the FOMC minutes our targets to the upside are first 1522, then 1526 before retracing back up to the highs of 1532.50. Remember, we still haven't seen our record SPX close yet so it may fight to stay up in this territory until it does. Sorry for the exessive lines on the charts, but in a chopping market like this it's a necessity for me. (Note that today's close couldn't make it above the BLUE downtrend line...watch that one tomorrow too) I went with a wider view today so you could see some of the horizontal support levels on the way down. Last but maybe most important, remember that we are still in an Uptrend. Be careful if buying puts as the market continues to bounce back up very quickly after all of these pull backs.

SPX 15m Chart

Shanghai Surprises

I'd like to pass on a link that you might find useful especially on those nights when you see futures down 5.00 (like tonight) and wonder might be causing it. I checked the SEE Composite (Shanghai Stock Exchange) and saw that it was down over 6% in Wednesday's trading. I'm not saying that there will always be a direct correlation, but on a day like today it will keep you from scratching your head too much.

Here's the link http://www.sse.com.cn/sseportal/en_us/ps/home.shtml

Tuesday Chop Fest

We did a lot of nothing today as we chopped back and forth all day. Despite the strength back up in the last afternoon, we settled on the downtrend line that started a few days ago. Tomorrow the FOMC minutes come out at 2:00 EST so it will be interesting to see what direction we decide to head... or if we just chop sideways for a while. I'll be watching the 20MA on the daily chart very closely if we decide to fall again as that was support for last Thursday's pull back. Great day for Iron Condors!

Tuesday Trendline to Watch

After a long 3 day weekend, the market is due to open slightly higher on merger news. Lets keep an eye on the uptrend that was created last Friday after we broke the downtrend on the 15m Chart.

Afternoon Pop to the Upside

We consolidated today and as the trends collided we were able to break the downtrend and hold the uptrend on the 15m bars. We'll see how we finish up the day with low volume into the 3 day weekend.

Looking at the $SOX for a Temperature Reading

The Semi Conductor index is often a leading indicator for the broader markets and this morning we can see it hit resistance on que as it bumped up against the downtrend line that started on Wednesday. Lets keep an eye on this trendline today and Monday as a possible indicator on which way we're going. Today will most likely be a chop fest since were back down in the channel and there's lots of "noise."

$SOX 15m Chart for the past few days

Trendline Break on the SPX

This mornings sell off gave us a break of the daily chart uptrend. Up until today that has held since March 12th.
Keep an eye on this level as it may signal the start of a longer term trend change. Lets see if it can rally back above in the afternoon session and keep this trend entact on the daily chart.

Getting Visual on Iron Condors

Below is a hypothetical look at an Iron Condor on the $RUT. We'll talk about the chart and early exits on a Iron Condor like this.

What Are All Those Crazy Lines?

Today was a very interesting day on the SPX, we'll talk about it on tonights call. I used different colored lines so you would be able to quickly identify which trendline I'm talking about. Chart is using 15m bars.

Wednesday's Conference Call

Tonights call will start at 8:00pm Pacific, call in number is to the right...

Greenspan Moves the Market Again

After Greenspan made some comments regarding the unsustainability of gains in the Chinese Stock Market we saw a great deal of selling and broke through 2 upward trendlines on the 15min chart. Lets see if the next level of support holds.

Possible Intraday Upside Breakout

Keep an eye on this highlighted area. A break above will likely signal another leg up. If it stays below we'll likely see more consolidation. The semi conductor index ($SOX) is grinding higher which is often a leading indicator for the broader markets.

SPX 15m Chart

SPX Key Support

Keep an eye on this upward trendline (green) formed by the 15m bars. This will be a key area of support if we expect to move higher. A break below may head us down to the other trendline support.

Can The SPX Be Tiring?

I’d be tired if I were the SPX. We’re still holding a 15m bar uptrend and an uptrend line on the daily charts, so the minor sell offs we’ve seen the last 2 days are normal in relation to their current over extension from the trendlines. We almost had a record close today but just missed with the flurry of selling in the last half hour of the session. If we pull back tomorrow, keep on eye on the 2 trendlines from the 15m and daily charts. If we move up, then no surprise there either. The green dot is highlighting the key support area on the trendline of the 15m chart. Also note that we are sitting atop of the channel on the daily that was established back in January. This could also act as new support.

SPX Daily Chart



SPX 15m Chart

Tuesday, Flat Open

Sorry, no chart this morning as Prophet Charts is havig technical issues again this morning. The market opened up flat in the first half hour of trading so lets keep an eye on yesterday's lows. A drop below those levels and our short term outlook would be bearish. We still have some support levels below. I'll post a chart later today to illustrate those as soon as Prophet is back up.

Conf Call Changed to Wednesday this Week

Sorry for the short notice, but this weeks call will be on Wednesday instead of Thursday.

Slight Pull Back on the SPX

On the prior post we talked about a short term trendline on the 15m chart. It did not hold, and with that weakness we had a minor sell off before catching at the 50MA and bouncing back up a bit to close at $1525.10 (still a few points off the all time record). We'll have to wait and see if the bulls come back tomorrow, (just like they have been for the last couple months) to give us our new record close. The chart below shows the break of our short term uptrend. The purple trendline is a longer term uptrend of the 15m bars, we closed just below it today.

Watch to See How this 15m Bar Closes

We have a key support area on the 15m chart being tested right now. The outcome may determine the rest of the days trading. If we're able to keep this trend for the rest of the day, the SPX will set a new all time high.

SPX Record Just a Short Rally Away

Another bullish day finishing very strong with a new 2007 record on the SPX. We're still holding on to the trendline on the 15m chart, and the next upside target to close would be at $1527.60 to break the all time record. Probabiliites are high that we will see that within the next week. Should we pull back on Monday, here are a few target levels of support:
- Support 1: 1519.50 30MA & 15m chart trendline
- Support 2: 1516.75 50MA & 61.8 fib (see chart)
- Support 3: 1512.50 100MA
- Support 4: 1511.00 trendline on the daily chart
- Support 5: 1508.00 200MA
In any case, another week of solid gains and confirmation of our uptrend.

SPX Still holding the uptrend

Yesterday's pull back to support at the end of the session hold as we gapped up this morning on more deal news. Keep an eye on this trendline. So far we're looking bullish for the day. Chart below shows the trend line on the 15m chart.

SPX heading into a key support area

SPX heading into a key support area where 1510 and 2 day uptrend line intersect on the 15m chart

Upside / Downside SPX Targets

We closed Wednesday on some unexpected strength to bring us within 69 cents of completely retracing yesterday's move down. Looking at the Daily chart we're not only within striking distance of the 161.8% retracement of the Feb. 27th slide which would give us a bullish target of $1522, but were also only 13 points away from setting an all time record on the SPX. The number to beat is $1527.57 which was the close on 3/24/2000. Those are the bullish targets for now and before we start trying to pick a top lets remember that we're still in an uptrend that many have been calling tired and overbought for the last 5-6 months (myself included). It's time now to let the market do what it wants and focus on probable upside targets. We have yet to break the 20MA on the daily SPX chart for this entire 2 month move up so the price action and chart are still screaming "Bullish." Elevator is still going up so don't hit the down button until we see real evidence that we're breaking trend. A break of the 20MA is one of the first signs we'll look for. Remember, we're sitting at resistance so it would be prudent to make sure we hold that level before entering any long SPX trades. There is very little support between 1514 and 1507 should we move down tomorrow so proceed with caution. We might look for some consolidation in that 1507 area if we do move down.

Yet Another 100% Retracement...

We talked about the bullish bias this morning and the price action followed through with a strong move up in the afternoon session. We saw the erratic chop we expected to see, but the 15m chart formed a nice wedge with some early indications that the bias was going to be a move to the upside. The LARGE green area shows the 2 support bounces we had this morning on the 60m chart and the blue area shows a higher low within the wedge formation. The small green highlighted shows the wedge breakout to the upside. A bullish entry around $1506.65 would have been a good low risk entry with a stop at $1506.25. We would typically expect a strong move on a wedge breakout regardless of which way it would have popped, so potential strength of the move would have been a positive factor for entering the trade. Once it broke out to the upside, the target became yesterday’s highs and ANOTHER 100% retracement that we continue to see in this bullish environment. Lots of disappointed Bears again today, but tomorrows another day… I’ll post more tonight on bullish targets, but also look for another potential reversal tomorrow as we’re sitting right at resistance again. With no news or reason to go up tomorrow we could easily slide back into the channel again. Also of note in that wedge was a failed topping tail (looks like shooting star)—it was the candle just prior to the wedge breakout. This is why it is very important to wait for topping tails to confirm before entering a bearish trade. In this case even if it would have confirmed with downward movement, one would want to wait for the price to break “out” of the wedge to the downside before entering.

SPX Holds 60m Trendline

This mornings erratic action still has some bullish bias as the sell off reversed for a higher low at the 60m upward trendline. You can draw this line by bring up a 60 day chart in Prophet Charts and drawing a trendline up from the bottom of the “body” of March 14th to the bottom of the body on May 11th. As you can see in this mornings chart, we held both times and bounced hard to the upside at that support level. This will be an important area to watch if it breaks below that trend line. Intermediate bias is still sideways until we break above and hold above yesterdays high. Chart below shows 15m bars bouncing off support.