July 2, 2012
COMP appears to be following a set of channels within a much larger channel we identified months ago.
Whether it has the wherewithal to rise up out of the large red channel remains to be seen. In the meantime, we’ll focus on the short to medium-term picture.
Lots of updates posted here tonight: SPX, DJI, VIX, COMP, NYA, NDX, DX and EURUSD. Summary charts here, or check the index tabs under the MARKET tab in the MENU. I’ll have the rest of the indices and the metals posted later today.
Each of these will typically be updated at least weekly, while I usually rely on SPX, VIX and DX to tell the day-to-day and intra-day story.
In general, I’m seeing an almost identical pattern setting up in each of these RSI charts — and it’s bearish. Unless this is a masterful fakeout, the next move should be down — possibly the result of PMI manufacturing or construction spending data due out at 10:00AM EST.
Good luck to all.
COMP completed a tiny Crab within a little Butterfly pattern and tagged a key trend line off the 2007 highs.
I call it a trend line because it’s exactly parallel to the line connecting the 2002 and 2009 lows. A reversal here would make for four touches — i.e. a channel. But, COMP could continue bucking its bearish divergence and go up to complete the larger Butterfly pattern (purple) at 3250-3295.
DJIA still hasn’t made a new high since completing a Crab Pattern a stone’s throw away from a Butterfly Pattern (purple) completion at 13,338.64. We’re still watching for a clean break of the rising wedge in the price chart and the trend line in the RSI chart.
Though, it’s important to note that, at these prices, we came within 28 points of completing a Bat pattern (yellow) at the .886 (13,317) in the weekly chart. That would make for a logical back test if/when the rising wedge finally breaks. It might also be the 5th and final wave target if today’s move stays within the wedge itself — which is just as likely.
Coming up….SPX.
