Charts I’m Watching: Jun 18, 2013

Lots of warning signs this morning.  The futures are absolutely flat at the moment.

The USDJPY is backtesting our new yellow channel midline after having completed two large H&S Patterns.

I’ll take a short position on the opening, with stops around 1644.  I’d like to see if SPX can push up through its neckline, or whether it again acts as resistance.

UPDATE:  9:41 AM

I show two small rising channels fighting for control of the near-term results: the white and purple.  Both have room to the upside, but both also offer interim resistance — as does the falling grey channel — which is an excellent fit as a corrective influence.

The small red harmonic grid shows a potential Butterfly or Crab Pattern down to 1617 or 1610, but it would bust at 1646.51.

UPDATE:  10:14 AM

SPX looks like it’s breaking out.  I’ll switch to the long side here at 1643.40 for a likely bump up to 1650-1653 — if it can break through 1646.50.

There’s a very good chance SPX will bounce around in the vicinity of the neckline now that we seem to be caught in the tractor beam of tomorrow’s Fed announcement.

The IHS Pattern is quite bullish, but confirmation requires that SPX close above it.  A break through 1646.50 would be a great start.  The next resistance is at 1648.69, then our interim target of 1650-1653.

UPDATE:  11:40 AM

SPX just breached the 1648.69 high, so there is little in the way of upside resistance from a harmonic standpoint.

We could see a reaction here at 1651-1653 — possibly as far back as the neckline at 1642. So, set your stops accordingly.

I’ll try a short-term trade here with a short position at any break through 1650, tight stops at 1650ish.  This might well be premature, as the white .618 is just above at 1653.20.

I started to review the bigger picture yesterday, but was interrupted by the late session volatility.  Let’s pick up here where we left off.

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