The SP500’s failed move past 1175 created a new head and shoulders formation with a range of 53.25 handles (1174.75-1121.50). The market closed below its neckline (1121.50) on Tuesday weakening the market into the Globex session to make a low of 1106.00, filling the gap from the May 7th (1107.00). Now that this gap has been filled, the market can attempt to fill back higher and try to reclaim its losses. Resistance will be met at the neckline of 1121.50, then the intraday pivot of 1122.63-1131.38. The top of the 3day pivot for tomorrow is at 1136.13, close to the previous h/s target of 1136.75. Failing to hold this gap area gives this current head and shoulders formation a potential target of 1068.25.
Oil’s failed breakout after making a new high on May 3rd of 87.15 has now seen an almost $20 move to the downside in less then 3 weeks. The saying that false breakouts lead to fast moves was proven as the market quickly came down to test the bottom of its weekly channel. This channel was taken out last week with a close of 71.61. This week, the June contract is going into settlement on the 20th, and a low of 67.90 has been made reaching toward a 38.2% Fibonacci retracement from the January 09 lows of 33.20 to the recent highs of 87.15. Crude is down 6 days in a row; this trend will be tested tomorrow as the EIA inventory numbers will be released and bulls look for oversold conditions. Resistance: Intraday pivot range 72.96-73.71, 3 day pivot range 73.55-75.48.
RISK DISCLOSURE: PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THE RISK OF LOSS IN TRADING FUTURES AND OPTIONS IS SUBSTANTIAL AND SUCH INVESTING IS NOT SUITABLE FOR ALL INVESTORS. AN INVESTOR COULD LOSE MORE THAN THE INITIAL INVESTMENT.
3 comments:
Nice work Chicago, your measure rule nailed today's low (1067). Will it hold?
Oversold conditions should see some covering in this area and try to fill higher or consolidate. You expect the h/s target to hold http://twitpic.com/1pkaoj, but also expected the April target of 1136.75 to be enough, but market 'glitch' sent it 80 points lower in seconds before returning back to the neckline of 1176 after some days, http://twitpic.com/1kg3n1.
Theres a big correlation with copper and the market, so long as copper stays above 280, markets can hold. 280 is the neckline for copper, there is a left shoulder and a head, possible time for the market to build a right shoulder: http://twitpic.com/1pl6z8. If bulls are strong, head will be taken out.
Building on that shoulder and SP follows to retest 1150.
Nice charts dude and amazing calls. We bounced right off the bottom of that glitch day near your measure rule target! Also, your failed breakout/ H&S chart a few weeks back was spot on dude. If you take a step back and ignore the spikes down we are basically forming a pretty nice downtrend following that top. I'll post some charts this weekend, mind if I throw up that first one of yours? (with the checkmark)
Again, well done OP.
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