DAILY MARKET RECAP Tuesday February 16, 2016

Posted on Tuesday February 16, 2016
Tuesday February 16, 2016

Key Datapoints:

Key Developments :

  • 2nd Consecutive Gap And Go
  • Follow through on the cup/handle pattern targeting 1908


Using a big gap up during the holiday yesterday, futures held the gap and continued higher today. Since I was on vacation last week, let’s do a quick review of how this rally started and is continuing. 

If you remember to start last week, we were watching this H&S pattern on the 30 minute time frame. Monday started off prefect for the Bears with a big gap down. We then retested the neckline Wednesday with a Yellen testimony gap up. That strength was sold and the January lows retested at 1812. 

From that low, using a rumor about and OPEC meeting which did occur this morning, we saw the formation of an inverse H&S which was acquired Friday on the close at 1862.52.
Doing so, laid the foundation for a larger Cup/Handle pattern which triggered today with the gap and go and has a target of 1908.72. At this point, things look pretty good to acquire that target. 
That being said, even if it were to acquire the target, technically, the larget 30 minute H&S that fell short of it’s target, would still be a potential pattern below the right shoulder. So it will be interesting to see where we go from here. 


The Bottom Line:  
The bulls are doing their best to defend the daily H&S neckline targeting 1600. They formed fired and completed 1 inverse H&S and have a cup/handle in motion targeting 1908. If and when that traget it acquired, things get far more interesting. We don’t have price action to reverse us lower yet, but I am very much on the look out for it. I’m not pressing things here. This may very likely be a bear market rally. If we can continue to see bullish patterns acquire targets, I may change my tune, but until I a deeper pullback on this rally bought, I am still looking to sell strength, although I have not done so just yet. 

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