The Fork in the Road

The S&P 500 has one foot in the 1600’s and the other reaching for the 1700’s.  I’ll play along on the long side on the opening, but am still looking for a reversal — probably at or just above 1700.

ES is finally trading above its own double top, but is running into a channel midline that should provide resistance around 1695.

The dollar has found support at the .618 we pointed out yesterday but hasn’t yet broken out of the falling wedge.

And, the EURUSD continues to waffle.

The USDJPY fails to break out again (43 sessions since its May 22 high)…

…and continues to run into trouble on the daily RSI chart: now stuck beneath another channel line (red .75.)  If it loses the white midline, there’s a very good chance of the H&S playing out (price chart) without the purple .886 tag (D, above) first.

Summing it up, all the stars are aligned for a pullback here — if SPX will cooperate.

UPDATE:  9:36 AM

SPX gapped up to the small scale (red) 1.618, which forms a nice little rising wedge tag just shy of 1700.  I’ll drop the long position and go full short here at 1698.

BTW, I have recently updated the RUT, COMP and NYA charts for anyone who’s interested.

UPDATE:  1:15 PM

SPX just broke through the midline of the small falling channel at 1694.  If the downside momentum from this morning’s reversal is to be maintained, this rise should be limited to the top of the channel: 1696-1698ish.

While we’re waiting to find out whether the decline sticks or not, let’s take a look at the current forecast and the interesting next few weeks ahead of us.

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