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S&P 500 - target reached, now what?

After the buy signal 3 weeks ago, the target area 1 375 - 1 400 for S&P 500 has now been reached. At this point, there's reason to be cautious. As illustrated on the chart below, a rising wedge could be in the making, and if this pattern breaks to the downside, things could get pretty nasty.  S&P 500 needs to hold the rising trendline, currently at around 1 340, which also corresponds to the 50-day moving average. I'm bull above 1 340 and bear below 1 340.

DAX

Stochastic gave a sell signal from overbought levels today. I'm targeting 6 400.

EUR/USD - in bear territory

The euro got hammered today. In yesterday's post, I was leaning to the bull side, but wrote that a break above 1,26 or below 1,25 would lead to the next big move. 1,25 was broken hard today and so far we've reached as low as 1,2360

EUR/USD is just bearish. Next important level to watch is 1,23, the price low from early June.

EUR/USD

For stocks to continue rising, it's crucial that the euro also moves higher. Looking at the EUR/USD monthly chart, you can see that we have reached important levels. Positive momentum divergence is a positive sign.

Daily chart. After Friday's big move, there's been a pullback this week and today we reached 1,25. This could be the low for this pullback. It we continue below 1,25, we'll switch back to the risk-off mode again, with lower stock prices as a consequence. I'm leaning to that this is a bull flag pattern that will resolve to the upside. The daily candlestick also has a bullish tail. We'll see. Look for a break above 1,26 or below 1,25 for the next big move.

Zooming in on the hourly chart, it shows that a break above 1,26 would signal that the next upleg is underway.

Time for a short pause

Bullish action continues as expected, but now it's time for a pause, here illustrated by Germany's DAX index, which reached resistance at 6 560 today, and it's also extremely overbought. Look for a minor pullback.

Bulls on the run

Previous post disappeared, but I mentioned key support levels for Euro Stoxx 50 (2 100) and S&P 500 (1 300). These levels were tested yesterday and they hold. Today bulls took over, illustrated below by the clear break of resistance (2 200) for Euro Stoxx 50. This is strong price action from an obvious bottom formation, with positive momentum divergence etc.

Today's action indicates that prices will move higher in the short term.