Monday January 11, 2015
Key Developments :
- Market breaks immediate term trend into close and potentially forming an inverse H&S.
Today is the type of trading day I expected to start the week. We saw the morning gap sold and set a lower low into the mid afternoon session, and around 2PM the Buyers emerged. In doing so, we closed back above Friday’s close and broke the immediate term down trend line.
The market did give us one good short trade mid-day, that I was able to take advantage of. We can see this H&S pattern in the middle of the screen below, with a conservative target of 1902.90. It bottomed out at the aggressive target of 1901. That target set the stage for the higher low in the afternoon rally.
Here we can see that last week’s down trend has been broken.
With the Trend break, It appears the market is trying to carve out a sideways inverse H&S. A break above 1930.12 and follow through above the 1935.65 sing high, would give us a target of 1959.14. Watching this pattern will be my top priority tomorrow.
T2108 – % Stocks Above 40DMA.
Noticing that it basically tested the DEC 14 2015 low today where the Market bounced.
The Bottom Line:
It appears as though the oversold conditions have brought the bulls out of hiding to start the 2nd week of 2016. Although we don’t have any bullish or bearish patterns in motion, we do have what appears to be an inverse H&S above the down trend line. That should be our number one priority to see if it can trigger and complete itself tomorrow.
Chart of the Day:
So many charts showing technical breakdowns with targets around the 2013 Breakout level. I find this one very interesting. It is breaking and closing back below the 61.8 Fib from the 2013 low and 2014 high. Additionally it appears to be breaking down out of a bearish Flag. It looks to me like this one wants to also test the 2013 breakout level and potentially do a full Fib retrace to 12.61. Worth watching.