EOD Wrapup!

Well as expected FOMC announcement was a non event, the market actually sold off a bit but managed to rally into the close.

I mentioned the 904 level on ES where I was going to take a short position, now look at the chart of ES the top tick was 906.50 I believe and sold off from there. Could have banked some serious coin, but the tape looked very bullish and my computer is STILL giving me problems, I played it on the safe side. As stated in one of my favorite movies “Rounders” Matt Damon said “You can’t lose what you don’t throw in the middle” so true Matt!

Here is the charts, first is SPX daily, if you can see I marked what I believe what will play out in the short term. This price pattern is called a head and shoulders pattern. (RS) which is short for right shoulder comes in at the 925ish level, (H) which is the head is the top at 956.

What I believe the market will do is rally back up to the 20 ma (moving average) which is conveniently at the 925ish level, perfect for developing a right shoulder. Now this is a bearish reversal pattern, so if I am right I am going to look to LOAD up on the short side around 925ish and ride it all the way down.

We should make it down to the 880 level which is the neck line, if we break that the pattern is confirmed in which case a move down to the low 800’s is the most logical target.

On the 60 min chart you can see it a little more clearly with 880 and 925 being the pivot points to be respected.

I will post a little more about indicators that you see on these charts (RSI, Stochastics, MACD) sometime in the future for now, just remember the pivots.

Lastly, I will do a post on what I will believe the market will play out over the summer and into the fall. This head and shoulders pattern is just a small pattern in a bigger move, if that makes sense. Everyone have a good night!

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