On the weekend I illustrated the S&P's long term bearish wedge. Here it is again. As I wrote previously the market "appears to be headed for another test of long term trend line resistance, currently around 1840, just 1% above current levels. The bearish wedge is a devastatingly bearish setup. If it is the correct interpretation of market behaviour, then we will subsequently see a decline to the origin of the pattern (the 2009 low) or lower. In coming weeks we may see a throw over to complete the pattern, ie. a brief false break above the top line."
The S&P is also building a shorter term bearish wedge as per the following daily chart, with the top line also being 1940. Will we see a throw over of the short term wedge to complete the larger pattern? Nobody knows, but keep your eyes open, and we'll find out in coming weeks.
Monday, 2 June 2014
My post on the weekend focused on the bullish potential of the AUD/USD, but early this week the fledgling rally has faltered. Watch key trend line support around 0.92... below that and I suspect things could get exciting.