Wednesday, 23 October 2013

S&P 500 daily and weekly charts updated for European session

This morning (Oz time) I published a post titled S&P 500 rallies through long term trend line resistance with illustrative daily and weekly charts.

Today's Asian and European trade has been volatile (eg. Nikkei and ASX 200), so I thought it worth posting updated charts for the S&P. Though to my eyes, the key level hasn't changed, ie. the low of the week. Below that and the odds would rise sharply that a false break higher / throw-over has completed, in turn raising the odds that a top of importance is in place. Above that, and the short term potential for higher places remains alive.


Weekly (zoomed in slightly compared to how I have recently shown it)

ASX 200 struggling at weekly chart parallel trend line resistance, breaks hourly up trend

Weekly chart.

Hourly chart.

Nikkei plunges, showing false break higher / throw-over from multi month triangle

I displayed perfect yet unintended comic timing today, by tweeting the following just an hour or two before the Nikkei began to plunge, with the futures now some 4% below their peak from the preceding US session.

Worth noting that Nikkei has this week broken upwards from multi month triangle. Sorry no current chart

Daily chart illustrates the triangle, false break, and plunge

Zooming out to a long term monthly chart illustrates that the long term trend is down, so downside surprises at shorter time frames should not really surprise.

NASDAQ daily chart - futures showing false break higher / throw-over in European trade

AUD/USD rebounds lower from test of long term resistance, 96 key potential support

Weekly chart illustrates the test of long term resistance.

Daily chart shows that the turn lower coincides with the 50 Fib. 96 appears key, below that would break the two nearby trend lines.

S&P 500 rallies through long term trend line resistance

Not for the first time, US stocks brushed aside my rhetoric, and chose to rally. The blogger component of my ego is bruised, but the trader in me is happy to have a clear signal.

To my eyes, the rally is more significant and promising than even many perma bulls suspect, as it took the S&P 500 above a trend line that has held against multiple tests over almost five years, shown on the weekly chart. So long as the S&P remains above those lines, it should continue higher. Trend lines are a useful "line in the sand".

Daily chart shows the market rallying from the recent channel, and suggests that this week's low could be an important launching point for further rally.