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Channels & Patterns


The bears have a shot at at least some downside this morning though there hasn't been any real selling so far this year. However the rising channel on SPX is holding, and the second touch of channel resistance on Thursday was retested on Friday on negative 60min RSI divergence. There's been some weakness overnight and if there is a break below 1470 then I have a small M top target in the 1457 area with some possible trendline support in the 1467 area. Here's how that looks on the ES 60min chart:


On the SPX 60min chart there is a small short term rising channel and a break below 1470 ES should break that channel. while the overall rising channel holds upside looks limited, though we can of course just continue to trickle up under channel resistance:


SPX daily bollinger band resistance has now hit 1500, but that isn't a target this week unless the rising channel on the SPX 60min chart breaks up. The daily middle BB is now at 1453. As an aside I've been looking on this chart at the longest period since July 2011 that SPX has trickled up under the daily upper bollinger band without testing the middle bollinger band. The longest periods on this chart were about a month before that test, and we're three weeks into this move since the first touch of the upper BB so I would expect that test in the next few days:


EURUSD is looking promising for some retracement here. There is a possible double-top at 1.34 with a target in the 1.311 area on a break below 1.325. I also have trendline support on EURUSD in the 1.311 area so this is a promising setup:


CL has broken above clear trendline resistance. If there was a rising wedge here on CL that would look bearish but there isn't. Trendline support is now in the 93.4 area and strong resistance turned support is in the 94.8 area:


As long as rising channel resistance holds on SPX I am favoring some retracement on SPX soon to at least test the middle bollinger band on the daily chart. There is a promising setup for that this morning which may well deliver if we see ES break below 1470. These trickle up moves can last a while though and I would see the retracement setup today as promising rather than probable. We shall see.