Chicagostock Trading

The Euro today rallied into highs of 12808, taking out the June high of 12759 and completing the inverted head/shoulder target of 12775 from the 12413 neckline made on the "draghi sale" when the market fell to retest the July lows. The buys at 12147 saw most covered before the break of the neckline.  As the market took out the neckline of 12413 runners were left to see if the Euro can complete its 12775 target. With this complete, this trade is now done. Going forward, new support comes within 12626-12503.  Next major upside resistance is met against 13082 to fill the gap from the May highs of 13287 of where the Euro failed.  

Reference: Euro's Inverted Head/Shoulder

It was no easy task for silver bulls this summer as the market tested the patience and strength of silver bulls.  The market fell to test its support of 2600 through summer with a low in June of 2610, never breaching 26000. This made bulls sweat bullets as a break below this would squeeze out longs.  A very tight trading range off these lows up to 28445 was created as the market found buyers to step up and defend the June lows, putting pressure against the top of the range which finally gave way for the market to break above going into the December futures contract.  The short squeeze has reward summer buyers  by reaching its first target of 32 off 29 being a gain of $3 which was the original risk down to 26. Going forward, major resistance is met against 3385-3758 being the range of where the market reversed in March of this year.  The second target comes in at 35, however a break above this range at 3758 is needed to trigger a longer term short squeeze and attract more buyers to target last summer’s highs of  44275. New minor support is met at 3100-30265, thereafter, 29500-28500 offers next major support based on the top of the trading range during summer of 2012.  

Since completing the 1422 target with highs of 1424.75, the SP500 has been in profit taking mode.  This action has led the market back down to test the top of its channel that was broken on the 3rd of August. Shaking of the tree is being seen as the market looks for support.  1385 is the next major support level, also coinciding with a 23.6% retracement of the 1262-1424.75 move.  This is where buyers must look to hold to show they are still in control and attempt the next leg up into 1441.  Stops below 1349.

Today the SP500 completed its target of 1422 by the bullish patterns created during the months of May - June.  The year lows of 1259.75 held in June with lows of 1262.00 as the market double bottomed to keep the gap from last year downt o 1252.50 open, keeping the bullish momentum alive.  The market consolidated against these lows and created an inverted head/shoulder pattern with a 1342 neckline, targeting 1422.  An attempt to breakout was seen early July before the market went into another consolidation phase, creating a cup/handle pattern and retesting the 1320-1297 right shoulder.  This created another double bottom against 1420 in July and the market rallied into its upside resistance of 1385.  During the month of August the market squeezed above 1385 and held above to keep shorts trapped which led to a slow chipping away at the May highs of 1411.75.  Which this hold above 1385, shorts were forced to squeeze out, leading to this high of 1411.75 being taken out and finally giving room to take out the year high of 1419.75 and complete the target of 1422 from the 1342-1262 inverted head/shoulder.  Today as the market completed this, instant profit taking was seen as the market reversed down to 1408.  At this point a shakeout can be seen to test downside support down to 1383 with major stops below 1349. Breaking below this low derails the upside momentum to see further downside.  Going forward, as the market looks for downside support and longs who have riden this over the past few months take profits, the late comers and shorts can give the fuel for the extra 20 points to complete the final squeeze of 1441 being the May 08 highs. This completes the short squeeze from the 665.75 lows put in 2009. A squeeze of 1441 can then give room to look for a correction in the market, however will need to see if the market can stabalize or fails following the move.

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