The US SPX500 has formed an intraday double top
Thursday, August 19, 2010
, Posted by Usman Ali Minhas at 6:14 AM
The US SPX500 has formed an intraday double top along the highs at 1100.14 (A) and 1099.77 (B). This stopped the equities bulls in their tracks, preventing a more significant breakout during a day when the index seemed determined to trade above Tuesday’s session high at 1100.14. The consolidation that followed the double top rejection helped form a Triangle pattern—one that is currently heading lower towards the uptrend line support at 1088.50 (X).
With the two-bar Autochartist Initial Trend reading showing that the 60-minute chart is currently in a narrow, sideways market cycle, look for an opportunity to set up an Autochartist Initial Movement/Momentum (AIM) entry should prices either sell off through the Triangle’s uptrend line at 1088.50, or rally higher through resistance at 1099.77. Note that the 200 period simple moving average is now plotting along the double top and will make this level a more formidable ceiling—as will the whole round number at 1100. If prices do break lower, look for a Breakout reading of six bars or more as well as a negative MACD Histogram in order to confirm bearish momentum as the pattern breaks down.
