$SPX 60 Minute: We finally closed that second gap today, as price once again is testing that middle pitchfork line. The bottom pitchfork line is about where significant support lies on the daily chart. That doesn't mean we have to but if it's going to, it should happen soon. The next couple days could be interesting to say the least.
$SPX Daily: This is my preferred view on the market, which means I don't think the top a few weeks ago is The Top. Often, wave 4 will push the MACD below zero, which is what we finally have. In this view, I think we are building wave 4. We still have a little room before price creates a bottom channel line. I've drawn in what might be possible if price holds the channel line, which is the creation of a flat pattern or an ascending wedge, and then the 5th wave to follow. All just theory for now, I'm not trading any of that currently.
$SPX Weekly: We have two price lines. The top black line is resistance we have failed to clear and now we are falling back to the 2nd black line acting as support. Notice the blue channel lines correspond with those off the daily chart and anchor to the low in 2009. The bottom channel line and the black support line cross, which is potential for a wave 4 support point. The counter view is that the MACD is just turning down on the weekly which could support a much larger push lower and break both lines and continue to push lower, which would support the more bearish view that The Top is in a few weeks ago.
IBM and AAPL Weekly: For the first time both are behaving with more bearishness in price than in a very long time. IBM is 9% of the DOW and AAPL is 21% of the $COMPQ. They are simply too big not to follow. They and they alone can pressure markets. If they are both going to press lower, I can't see how the market doesn't fall with them. The weekly charts for both have interesting technicals to look at.
I've got the channel lines on IBM, and you'll notice price failed right at the middle channel line and has reversed with the weekly MACD rolling over. It looks far more bearish than it did two days ago, so we need to keep an eye on IBM, a test of the lower channel line seems likely.
The weekly chart on AAPL reflects a price break down on the uptrend line with the MACD rolling over out of it's own little wedge pattern. I almost shorted this today, but it's such a favorite, it's an aggressive trade. I think I'm going to wait for price to bounce and give a possibly lower risk entry. If we are going lower the weekly BB and 50 week MA seem like targets.
$VIX Weekly: It's time to look at the $VIX on the weekly, which reflects we're almost at resistance, which means we probably have a little more upside and the RSI supports that possibility.
JNK: Here we go, finally some selling pressure in the junk bond market. Investors are taking risk off and this has rolled. I've got channel lines up for visual reasons. The middle channel line might act like support, which suggests a little more selling pressure. RSI and MACD support lower pricing.
$CPC EMA 5 daily: Notice the highs, they all in the past correlate with some kind of market low. In theory, I'm looking for this to finish a high mark when the $VIX tests resistance when Mr. Market tests the bottom channel line. Something like that seems to make sense. Just a little theory for now.
My Watch List: You would think with all this volatility, I'd have tons of charts. Yes, it's a head scratcher for me too.
GLL: Still looks like a little rounded bottom. If gold is going to slide like the chart suggests, this should bounce. Today looked like a little consolidation day, so a bounce above the red line adds to the bullish case for this one.
UNG: Hard to tell if this needs one more little low because the MACD could back test itself a little in supporting that. Up or down, price should move soon. Above the blue line is a good trigger.
KONG: This continues to be a great long side trade. Price has pushed right to resistance at $10 like advertised the past week. If I owned it here, I'd take some chips off the table. But that's just me.
From My Trading Desk: I can't believe I'm going to say this, but with all this price movement we had no trades today. I'm having a hard time with the past couple days. I can't find price and structure I like, and I've learned over the years that forcing a trade rarely works. So, maybe I can't find the risk reward I want. And maybe, I'm not excited about bearish trading if this a wave 4 down. In any case it's odd, but I don't want to force trading.
The Risk Chart: Here's something for the back of the head. The risk chart has pushed below the lower BB. If we look at all the times this has happened or it has pushed to the lower BB since Nov 2008, it usually proceeded a stock market low. Since it's well below the BB, it might need to bounce and fall to the trend line but stay inside the BB to actually mark a market low. There's a little more room on the RSI to support that event. Just a little food for thought.
Hope all is well.
J.D. Rosendahl, Rosey