Charts I’m Watching: May 1, 2012

UPDATE:  11:55 AM

SPX just completed its Bat pattern at 1414.97.  If it’s going to reverse — and not bust the H&S, etc — now is the time.

VIX hints this might be a corrective wave, as the falling wedge is being back-tested — as opposed to establishing new lows.  In fact, the 60-min RSI indicates a bounce-back for VIX is imminent.

UPDATE:  11:45 AM

SPY just tagged its Bat pattern .886 at 141.47; SPX is almost there.  I was stopped out of most of my shorts this morning, will re-establish some positions here — again, with tight stops just in case the alternative path holds on.

Despite this non-sensical strength this morning, the RSI channels argue for a sharp reversal.


Dollar up nicely, EURUSD off.  Stocks up strong, but running into overhead.  SPX is about to complete a bearish Bat pattern at 1414.97 (the points are labeled in purple.)

Census Bureau March Construction Spending came in at 0.1% increase over February, versus 0.8% increase expected and -1.4% prior month.  The strength, such as it was, came in private sector, with lodging and office supplying practically all the good news.  Public sector was off substantially, with infrastructure projects leading the decline.


The ISM Manufacturing survey just released with reading of 54.8 versus forecast of 52.5 and prior of 53.4.  This is a fairly positive report, and contrasts starkly with yesterday’s PMI Non-Manufacturing survey, not to mention virtually all of the regional manufacturing surveys.  Doesn’t smell right.

While this survey is a positive for the economy (remember, like all surveys, it’s about perceptions) it does throw a little cold water on QE expectations.


Looking for more on this, but just saw a news blurb about JP Morgan tax exempt money market fund — Moody’s withdraws Aaa-mf rating.  The JPM website suddenly doesn’t mention the Moody’s rating…


Charts I’m Watching: May 1, 2012 — 4 Comments

  1. What is the target for this bat ending at the 1414/1415 SPX?  Great new site. Glad to be a part of it!

    • Welcome, PT!  An objective range of targets is based on a Fib retracement or extension of the AD leg.  In this case, A was 1357.38 and D is (so far) 1415.32.  The initial target would be .618 of that, or 35 points (1380.)  A .886 retrace would be 51 points, or 1364.  A serious reversal @ the 1.618 extension would be 93 points, or 1322.

  2. the very first comment! i coul start with lamenting. but that doesn’t help. but i was doing excactly the same. shorting spx here with stops slightly above 16 and 17. but i think (thinking leads to lamenting) currencies lead the path. by the way very interesting cycle towards end of the week as long markets stay below april 2 highs. 90 + 45 days. often precondition for crash cycles or at least sharper sell-offs.

    • favorite line of the day: “thinking leads to lamenting.”  Interesting that USD and stocks are marching to the same tune today… agree on importance of 1422.  this thing is balanced on razor edge right now.