Charts I’m Watching: Feb 26, 2015

The e-minis are essentially flat this morning following the first negative inflation (aka deflation) print since the financial crisis.  There’s an obvious retreat level around 2102.50 that would allow the rising red channel to flesh out and a backtest of the larger rising white channel (the upside target is equally obvious at the red 1.272 @ 2120.98.)

2015-02-25 ES 60 0620Such a decline might enable SPX to tag the 10-day moving average at 2100.08.  Though the daily rising wedge looks intact…

2015-02-25 SPX daily MAs 0620…the 60-min shows a breakdown late yesterday.

2015-02-25 SPX 60 0630Rising wedges have been notoriously unreliable since central banks took the wheel.  About the best bears can usually hope for is that they broaden into a rising channel.  Still, SPX was allowed to dip below the lower bound, so we’d be inclined to bite…

…if only USDJPY weren’t riding to the rescue.

2015-02-26 USDJPY 60 0630UPDATE:  9:50 AM

On our usual, detailed chart, it’s fair to say the rising white channel from Feb 2 looks like it’s finally ready to give up the ghost.  The purple one we proposed about a week ago would gain additional credence with a backtest at 2100 — its midline.

The timing looks like next Monday, Mar 2.  That would necessitate a delay of the 2138 tag — which fits with my leading scenario just fine.  Though, I can easily envision a bigger drop to, say, 2093.55 right here and now.

The key for bulls is to frame it as a backtest of the horizontal red channel.  If that should fail to hold, a dip to the SMA20 at 2068.24 would permit a backtest of the broken falling gray channel and further flesh out the rising purple channel.

2015-02-26 SPX 60 0650It looks like that might have to wait, however, unless CL can poke through the bottom of the rising red channel.  I believe it will, but am less clear on the timing.

2015-02-26 CL 60 0700ES has done its part, having nearly reached this morning’s initial downside target.

2015-02-26 ES 60 0705Unfortunately, I’ll have to examine it after the fact.  I have a plane to catch and won’t be able to check in until after the close.




Comments are closed.