The eminis are flirting with danger this morning, having ducked below a key channel midline (dashed, purple) but bouncing off a smaller channel bottom and another channel midline (dashed, white) near a .786 (1674.15) for a Gartley Pattern completion.

The dollar is threatening to break out of the falling wedge….

And, the SPX is set to tag the neckline of the yellow H&S Pattern again.  Holding above 1686 will be key.

I’ll play the downside on the opening with an eye towards the red .886 at 1679.86 — our target from last week.

UPDATE:  9:35 AM

We got a bounce at the pale blue channel midline, but I suspect it’s just to back test the neckline and that 1680 is still on the table.

The danger for bears is a dip to tag the .886 and complete the H&S Patterns, then a rebound back above the neckline to invalidate the patterns.

continued for members…UPDATE:  9:44 AM

SPX came back to the neckline quite forcefully.  I’ll take a protective long position at 1686.

UPDATE:  11:52 AM

SPX is losing momentum in the comeback.  I’m closing out the long position here at 1690 and resume full short.  Charts in a moment…

 

UPDATE:  2:30 PM

I’ve spent the past couple of hours playing with channel lines and added a new post entitled Major Channels.  From here on, I’ll use the charts developed in that post — meaning that some of the features and colors may have changed.

Here’s a close-up in the 15-min timeframe.  Note the small Crab Pattern 1.618 at the level of the white channel .618 and the H&S target at 1655.  Unless SPX gains a bunch of points in the next hour, I’m inclined to stay short overnight.

Note the lack of channel support on the daily RSI chart.  The red circle marks Aug 26.

Also, it’s worth noting that SPX is trading below the SMA 10 (1696) and the SMA 20 (1692.) The SMA 50 is at 1653 — the white channel .618, H&S target, and purple 1.618.  And, the SMA 200 is at 1544.  I wonder where it’ll be on Aug 26…

UPDATE: 3:50 PM

Wondering where the last minute spurt is… Seems like 1693.92 is all set up, but no action yet.  Nice back test on the white .886 channel line.  I’ll hold short overnight with stops at SPX 1695.30 for those with the means to hedge.