We don't use, usually, this tipe of chart figures, but it can confirm our target of 1,330, by other methods.
Today, Arthur Hill from Stockcharts.com confirm our call of bear flag in $SPX from yesterday.
IWM AND DIA FORM RISING FLAG PATTERNS -- USING THE SLOPE TO DETERMINE THE TREND -- CONSUMER DISCRETIONARY SPDR HITS CHANNEL RESISTANCE -- FINANCE AND INDUSTRIALS SPDRS SHOW WEAKER UPTRENDS -- MATERIALS AND ENERGY SECTORS SHOW RELATIVE WEAKNESS
IWM AND DIA FORM RISING FLAG PATTERNS... Link for today’s video. After a sharp decline in early April, stocks bounced the last 5-6 days with the Dow Industrials SPDR (DIA)and Russell 2000 ETF (IWM) leading the major index ETFs. These bounces traced out patterns that look like rising flags, which are typically bearish continuation patterns. Chart 1 shows DIA with a rather steep rising flag that exceeded 130 on Tuesday. Today’s price action is thus far contained within yesterday’s range and it is possible that an inside day is taking shape (blue circle). Inside days and harami patterns show indecision that can foreshadow a short-term reversal. A move below 128.5 would fill Tuesday’s gap, break flag support and argue for a continuation of the early April decline. This would target further weakness towards the 135 area. Support here stems from the 38.2% retracement level and the late January low.
Chart 2 shows the Russell 2000 ETF with a rising flag that is meeting resistance from the 9-April gap and support break in the 81 area. For now the flag is still rising with the lower trendline marking first support just above 79. A break below this level would argue for a continuation lower and target a move towards the next support level around 75. Support here stems from the 200—day moving average, broken resistance and the 50% retracement mark. As noted on Monday, I remain concerned with relative weakness in small-caps. Notice that the Price Relative remains in a clear downtrend as IWM underperforms SPY.