We got the close above 1350 we were looking for Friday. As discussed then, the next important test is the trend line connecting the April 2 1422 high with the last interim high of 1374 on July 3.
While the market seemed to have plenty of momentum coming out of Friday, this TL might not be a pushover. It has many cousins who’ve proven their mettle over the past year or two.
continued…
I’m looking for a back test of the white channel line this morning. Looks to be about 1350. Anything more and I’ll consider bailing on my longs (for an interim trade.) Otherwise, I’m holding long here.
UPDATE: 10 AM
Still holding in the little channel…
UPDATE: 12:15 PM
The little channel I wrote about a couple of hours ago held nicely, and we’re hanging around even on the day again.
UPDATE: 2:20 PM
Lots of indecision here, which I think is a result of the confluence of some conflicting trends. There are a number of longer-term channels to the upside in play…
And, some really compelling channel to the downside. This is the series that parallel the TL connecting the 1422 and 1415 highs.
The other series, that parallels the 1422 high and 1374 high (but ignores the 1415 shadow) is the one shown in the top chart. When we overlay it with the others, we get a chart with lots of possibilities:
Here’s the close-up:
More this afternoon, after the close.
Comments
4 responses to “Channels to Watch: July 16, 2012”
Hi, PW!!! Can you give us the roadmap for the vix for the rest of this year? Many thanks!!
Sure, I’m working on DX, VIX and EURUSD updates this afternoon. Hopefully will be done around 7pm EDT
Pebble,
Can you see another test of the TL off June 4 lows as a possibility before the
1390ish target by the end of the week? It seems it would take that to muster
enough steam to get above the TL down from 1422 – 1415 highs minus the
upper tail at 1415.
Hey Reeodd,
Never say never, but absent a new catalyst, I don’t see a cause for it. The channel down last week was pretty significant. And, you could make a case for more of a back test since Friday’s break out.
But, otherwise, the sentiment seems sufficiently negative for a ramp from here. These white channel lines have also been pretty reliable.
Now that we have a pretty well-defined channel to the upside, I’ll pay more attention to that as a guide to intra-day trading.
PW