After nailing Monday’s downside target of 1754.50 a little late, ES tagged yesterday’s interim upside target of 1780 right on schedule: 1780 @ 4:30. It leaked higher overnight, but is back to that level and threatening to complete a little H&S Pattern that might drop it 6-14 points this morning.
As expected, ES and SPX both reached the 1.618 extension of their drops from Sep 19 to Oct 9 to complete Crab Patterns.
A typical reversal after a Crab Pattern completion is to the 1.272 or lower: 1.0, .886, .786. So, I’ll be watching the channel lines quite closely to see if this is a bump in the road or something more serious.
UPDATE: 2:25 PM
It’s looking more like a speed bump. ES obviously leaked up past the 1785.25 high, meaning we’re probably going to need to resolve things to the upside before any correction can commence — if it does.
continued for members…
If it reverses, the leading candidates are the red .886 at 1787.96 or the purple 1.618 at 1790.15. But, there’s a 60:40 chance it slips past both of those and heads up to the white 1.618 extension (of the 1774 to 1736 move) at 1797.98.
Are we overdue for at least a pause? Yes. Will we get one? Maybe. Any corroborating evidence? Plenty. Check out USDJPY’s rising wedge and Bat Pattern completion.
Here’s another look at the current jumble of channels and Fib levels. The current little rally from 1777 to 1788 fits well enough in a rising purple channel of the same slope as the two previous ones.
They don’t look like it, all spread out on a 30-min chart, but these are wickedly steep channels within an already steep rising red channel whose .146 line caught this morning’s decline.
Its midline crosses 1837 around Nov 19-20. Because 1837 — in addition to the 2007-2009 1.272 extension (yellow) — is also the 2.618 extension of the 1774-1736 drop, I tend to think the Fibs at 1797.98 and 1821.62 might be tested.
Though that principle didn’t do so great with respect to the purple 1.618 at 1780 (the 2.24 of which is 1834.)
Buy and hold types might as well hold their noses and stay long — with appropriate stops, of course. But, I’ll continue looking for reversal opportunities along the way.
Things are getting quite messy. But, with any luck, they’ll clear up soon.
Comments
4 responses to “Charts I’m Watching: Nov 14, 2013”
PW…along the same line as Airyk…Do all pattern reversals (Gartley, Bat, Butterfly and Crab) share the same Target expectations for a reversal upon their respective pattern completion(s) as you outlined for the current crab pattern???
These are the most common reversal targets, depending on the strength of the rally. Based on how this is (not) reacting so far, we might repeat the 11/6-11/7 style overshoot — or simply ignore the 1.618 altogether.
Just to make sure I’m on the right page here, as far as a Crab completion reversal- you are talking about the red fibs (1.272 at 1752), correct?
For ES, there are two crab completions: the purple 1.618 at 1780.36 (from Sep 19) and the smaller white 1.618 at 1780.14 from Nov 11. The purple 1.272 is at 1750.35 and the white is at 1774.50.