Microsoft has been in a bearish ascending wedge for the last couple of weeks. It also has bearish divergence on the RSI both between the February high and today and between the high on the 10th of June and today. Notice that Microsoft was also in an ascending wedge before the so-called COVID-19 crash. And also notice that it tried to overshoot that wedge twice,...
The dollar index may have formed an inverse head and shoulders pattern. If it can break that neckline (red), then it may have significant room to run.
As noted previously, the S&P 500 futures had formed a very large bearish rising wedge off the March lows (blue). It *finally* fell from that and performed a backtest, which failed. It may be trying to make a second attempt to test that lower bound. There may also be a long-term channel formed from the February high to the intermediate high made on June the 8th...
Similarly to TSLA, which I covered a few minutes ago, Apple's chart is showing the same bearish pattern and indicator. A bearish rising wedge has formed (red) and there is bearish divergence on the daily RSI, with the price making higher highs while the RSI has made lower highs. This represents buyer exhaustion. (You can ignore the yellow lines. They are...
Though the VIX was down ~2% day, it remains elevated, and importantly, the VVIX (the volatility of volatility) is up today, and looking like it wants to launch itself off of a bull flag structure. For those curious, the VVIX measures "institutional hedging." Anything over 110 is considered worrisome for the markets.
As a follow up to my last post, if this is, in fact, a bearish wedge having broken down and being in the process of capitulating now, where could we end up? A couple of ideas. The two green support lines represent a great area of consolidation that occurred in 2015-2016. There is a great deal of trading volume in that area. It was the top of that trading range...
Taking a longer term look at the ES futures, I see a very large bear flag structure that has finally broken down and looks to be in the process of backtesting as we speak. Over a month ago, we also had a bear flag structure forming that broke down on May 1st. However, despite breaking down, it never capitulated, invalidating that bear flag as the relevant...
I'm weary of calling the top to this bear market rally, but this looks as good a place as any. We had been relentlessly charging up in a rising wedge, and then overthrew it in a sign of late-stage buying exhaustion, forming and head and shoulders pattern in the process. We have now broken the neckline of that pattern as well as fallen beneath the rising wedge,...
The ES Futures have formed a nice bearish rising wedge pattern over the last couple of weeks. Oftentimes, in the last gasp of a move up, a break above the top of such a wedge at its end is a signal of final exhaustion, and that is just what we saw yesterday. It was also at that moment that it came very close to reaching the 78.6% fib retracement from the February...
I had been watching the dollar index and I was interested in the formation of a decent bull flag. However, instead of rallying, it got totally crushed this week. The DXY is interesting because is measures the strength of the dollar against a basket of other currencies. And all it takes to get "crushed" is other currencies strengthening more than the dollar, which...
Just a quick update to yesterday's post on the SPY. I mentioned that it was nearing the top of a megaphone structure, and that the 78.6% fib retracement from the February highs to the March lows was just above that megaphone. Today, we opened just below the top trend line of the megaphone pattern and pushed right up through it, and then ran up in the final minutes...
SPY is looking to tag the top trend line of a long-term megaphone pattern that has been developing since January of 2018. It almost coincides with the 78.6% fib retracement from the February highs to the March lows. Despite the constant push up in the markets, I do still believe that we are in a bear market, and that the gains made in the market since the March...
I have been initiating coverage on the "Mega-Cap Tech Stocks" because their influence on the indices is so strong, in an effort to get a better feel for where, specifically, the S&P 500 will go from here. Whereas in my coverage of Amazon and Facebook earlier tonight, in which I was able to discern some classical chart patterns, with Microsoft, I have not been...
On the daily chart, Facebook appears to be at the upper extremity of a megaphone pattern. It is overbought at present, but also does not have bearish divergence on the RSI nor the MACD. That said, given how parabolic its rise from the March lows has been, I would expect it to correct from here. Yesterday's candle tried to push it above the megaphone and failed,...
A quick note on Amazon. On the four-hour chart, I see three things of note: a bearish rising wedge formed and looks to have broken. We need to see if this will retest the structure, recapture it, or fail from it early next week. Also, I see bearish divergences on both the RSI and MACD oscillators, with both reaching lower highs as the price of Amazon's stock...
I haven't produced any updates in a few days because not much has been happening, and I've had little to report. The market continues to drift sideways and up. There is not a lot of structure on the chart, no obvious pattern to discern at the moment. Do we have a triple top? Maybe. Mostly it's just a trading range. I do have a few things to mention. 1) Until...
I don't have much to report on this, except to demonstrate that: 1) We may have a small bull flag forming on the daily. 2) A big tell that the last few days "rallies" are fake is that, while the S&P moved to higher highs, the VIX did not move to lower lows. If this were a rally with genuine conviction and confidence behind it, the VIX would fall to lower lows....
On the one hand, we have a nice rising wedge tonight, which broke down and is backtesting now. That makes me think we'll work lower tonight and gap down. On the other hand, we're oversold now and due for a bounce. Psychologically, I expect the market makers to trap longs with a gap down, but they're letting longs of easy right now. Hmmm. I do expect that we'll...