Indices Forming The Perfect Coil; Air Looking Thin For Bulls
Declan Fallon | Dec 20, 2016 12:04AM ET
The indices had another inside day yesterday (in a series of inside days) to set up a good swing trade play. With the emergence of spike highs it would suggest a break lower is the favoured move (along with indices performing relatively weakly against their peers), but if shorts jump the gun and markers emerge from the coil higher then those shorts will be forced to cover - fueling fresh buying. The S&P is showing this coiling action best:
The Russell 2000 is the exception in that it's not coiling, and could be shaping a bull flag. The 20-day MA is playing as a possible jump point from support.
While the Dow is shaping a very tight coil
Santa may still have a few tricks up his sleeve, but the air is looking a little thin for bulls.
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