Charts I’m Watching: Apr 9, 2013

LOTS of freshly updated charts under the Markets tab: RUT, USDJPY, NG, SPX, COMP, DX, NYSE, FTSE, GOLD.  Check ’em out.

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Apparently jumped the gun a little yesterday by getting out at the .618.  The last 5 minutes saw prices ramp up through our entry point and our 1562.50 stop, but the basic thesis is still intact.  We should see a small reversal either here or around 1570.

I went long last Friday at 1539.86 [CIW: Apr 5 9:33] after riding a short position down from 1573, but got cold feet at holding a long position into the close — especially after bagging a 20-pt gain.

The market has gapped open more often than not over the past few weeks — typically on a change of direction.  This time I outsmarted myself and left several profits on the table.

I’ll play along on the long side and look for a loss of momentum at the .786 (1566.35) or the .886 (1569.77.)

UPDATE:  9:35 AM

Just reached the .786 of 1566.35.  Will revert to full short here with stops at 1570ish.

UPDATE:  11:35 AM

We got a nice sell-off from the .786 retracement (1566.51) but have yet to flesh out the rising channel I’ve charted.  Since it features such a steep slope, the bottom is rising rapidly — now up to 1560 or so.

The 6-pt drop to 1561.38 might suffice for a right shoulder on the IH&S Pattern, but it’s rather skimpy compared to the 12-pt left shoulder.  And, it’s not even one Fib level lower than the .786 turning point.

A more balanced right shoulder would take SPX down to 1555 or so.  That would mean a broadening of the channel, of course.  But, that’s to be expected with such a steep, narrow channel.

Keep an eye on the previous high.  A break of 1566.51 means this isn’t the right shoulder at all; it opens up the .886 at 1569.77.  But, a reversal shy of there (and especially 1566) means we’re more likely to tag 1560 or even 1555 before moving higher.

More later.

UPDATE:  12:30 PM

There’s the breakout, settling the question of whether we’re getting a deeper pullback or not.  Switching sides here for the run up to 1570ish.

Assuming we reach 1570, then what?

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