We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
Oil - US Crude
Wall Street
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The US Dollar is attempting to find direction against the Singapore Dollar, Philippine Peso and Indonesian Rupiah as technical levels hold. The Malaysian Ringgit eyes a key trend line. Get your market update from @ddubrovskyFX here:https://t.co/lcSLkOnJgQ https://t.co/vryqn4rRU4
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Gold: 0.01% Oil - US Crude: -0.03% Silver: -0.55% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/15QcnuOwHa
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: 0.01% 🇬🇧GBP: -0.02% 🇯🇵JPY: -0.05% 🇪🇺EUR: -0.13% 🇳🇿NZD: -0.22% 🇦🇺AUD: -0.23% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/vPJr6TpvF6
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.90%, while traders in US 500 are at opposite extremes with 78.20%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/xNfVZWeHaL
  • The $USD is falling against #ASEAN currencies such as the Singapore Dollar and Indonesian Rupiah as stock markets rise. Watch out for US-China escalation and Brexit talks. Get your market update from @ddubrovskyFX here:https://t.co/PziC8KZaIC https://t.co/IhJHu2WCVZ
  • For those who argue a bullish case for stocks... Let me counter with a single chart of the gold to S&P 500 ratio. Looks to me like risk-reward favors bullion over equities. $XAU $GLD https://t.co/6qiSh8E0ht https://t.co/lKViSEnrMc
  • - Silver prices could pull back as negative RSI divergence shows slowing momentum - Copper prices have risen over 20 percent, are now trading above 17-year uptrend - Monthly perspective show the base metal has entered into a key compression zone https://www.dailyfx.com/forex/market_alert/2020/06/02/Silver--Copper-Prices-Enjoyed-a-Nice-Ride---Is-it-Time-to-Get-Off.html
  • What is it about a colorful Bloomberg Terminal that is so satisfying to look at? https://t.co/Qtv9wwQv75
  • I have finally found a way to express the social climate in San Francisco and the effects of peer pressure: https://t.co/yYFXFHG2Lb
  • The US Dollar, Euro, British Pound and Australian Dollar will all be at the mercy of political developments in Asia, Europe and North America this week. An avalanche of PMI data will set the backdrop.Get your market update from @ZabelinDimitri here:https://t.co/L8cfAgVx94 https://t.co/vwChirq7SL
S&P 500/Dow: Topping Formation in Question Working its Way Towards Reality

S&P 500/Dow: Topping Formation in Question Working its Way Towards Reality

2016-05-12 09:48:00
Paul Robinson, Strategist

What’s inside:

  • The S&P 500 swiftly rejects resistance; market wipes out Tuesday’s gains
  • Topping formation (head-and-shoulders) potential increasing, but not there yet
  • Pattern development comes at interesting juncture in time and price

As it turned out, the resistance zone we had penciled in around 2078/83 was all the market could handle following the 3-day bounce. The S&P 500 revisited resistance yesterday morning for about 5 minutes before wiping out most of Tuesday’s rally, while the Dow wiped out all of it.

Yesterday, I said regarding the short-term hourly chart, “if buyers can’t chomp through resistance and a rejection results in a drop below support, then the inverse H&S formation will come under fire and alternative paths will need to be considered.”

Lately, the focus in most pieces has been primarily on short-term levels and chart configurations as the market continues to search for broader direction in a mostly directionless market over the past few weeks. So, stepping back to the daily timeframe: one of the scenarios touched on briefly yesterday was the possibility of seeing the S&P 500 (and Dow) carve out topping head-and-shoulders patterns. It’s still a little premature and the patterns may never trigger. (Keep in mind: lots of charts start out looking one way, but never follow through. For H&S patterns this means a break of the neckline before we have confirmation.)

A couple of simple reasons to believe the H&S formations will come to fruition are – timing and positioning. In terms of time, we are in a historically weak performing month for stocks. In terms of positioning, this development is taking place below pretty significant overhead levels for both the S&P and the Dow; 2083/116 zone and 18150/365, respectively. To further add on a different note, the Nasdaq lagging as far behind as it is, is not a sign of broad market health.

It’s fairly straightforward. The market needs to roll over and break the neckline which is easily identifiable at this juncture, and will act as support until it does. Thus far the pattern hasn’t become complex; multiple heads and shoulders, sloppy neck-line, etc. The pattern could use a little more time to develop a more symmetrical right shoulder, but sometimes the ugly ones work best, so we won’t overanalyze.

What happens if the market breaks down to neckline support and holds? Then a triangle could develop. Any experienced ‘pattern trader’ will tell you this is a fairly common occurrence. But, again, it is fairly straightforward; if the S&P and Dow don’t close below the neckline, then no official trigger.

S&P 500/Dow Daily

S&P 500/Dow: Topping Formation in Question Working its Way Towards Reality

For now, we will keep the short-term in mind and go about playing support and resistance with 1 to 3-day holds in mind, but if the head-and-shoulders pattern develops further and ultimately breaks the neckline, we will be ready to take a crack at catching a broad move lower. How much lower? We will come back and delve into further detail as this development becomes more relevant.

Looking for real-time sentiment data? Check out FXCM’s SSI Indicator.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter @PaulRobinsonFX, or email him directly at instructor@dailyfx.com with any questions, comments, or concerns.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


News & Analysis at your fingertips.