Earlier this week we covered how to recognize trend reversals with nothing but plain old vanilla price charts. In essence this involves establishing a sequence of higher highs and higher lows (or lower highs and lower lows during a sell off) which should remain unchallenged during the meaty part of a trend.
Merely one month after the U.S. accused Iran of attacking several oil tankers in the Strait of Hormuz two more tankers have now been attacked by torpedos in the Sea Of Oman (which happens to be nearby) by hitherto unknown aggressors. One of the tankers has already sunk but fortunately the crew of both ships had already been safely evacuated. An investigation is under way and thus far officials have been cautious to point any fingers at Iran, which however seems almost guaranteed to be implicated if recent history is any guide.
When it comes to indicators I definitely have come round circle during my evolution as a trader. Like most of us I started out like a kid in the candy store, especially during the early ThinkOrSwim years, which opened the flood gates on the availability of advanced tools for lowly retail traders.
The S&P 500’s 2900 mark now beckons as the E-Mini futures already scraped the ES 2898 mark overnight. Fair value (PREM) is only 50 cents right now due to the looming roll over, which means this would roughly represent the SPX trading at 2897.50. As I already outlined last week, a breach above SPX 2900 almost guarantees continuation to the upside. That said, after five consecutive sessions higher an obligatory shake out session would not be uncharacteristic.