U.S. stock indexes at critical short-term juncture

Near-term price action in the S&Ps and Russell 2000 will determine the next short-term trend

Several chart developments are worthy of note.

The advance on May 14 in S&Ps penetrated the upper boundary of a 6-month channel. This type of price behavior is typically a sign that the advance will accelerate. However, if the advance does not accelerate, but prices return to the channel, it can be a sign that the upside penetration of the channel was a blow off. Friday’s decline was a warning sign that the May 14 upside breakout was very possibly a blow off.

6.2_ES57_daily

The intraday graph displays a possible five-point symmetrical triangle top. Further downside momentum this coming week would indicate that the short-term trend has turned down. Funny thing about short-term trends — they sometime become longer-term trends.

6.2_ES57_hourly

The Russell 2000 provides a more optimistic chart picture. The daily chart displays a possible pennant. A close above 1009 would complete this pennant and would lead to another strong advance.

6.2_TF_daily

I will take my signals for shorting from the S&Ps and for buying from the Russell.

$ES_F, $SPY, $TF_F, $RUT

 

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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