Turnaround Tuesday Arrives On Schedule, But Will It Last?
Mike Paulenoff | Jun 29, 2016 01:20AM ET
ES (Emini S&P 500) is in the process of recovering some of the 138 point (6.5%) Friday-Monday Brexit nosedive.
Thus far, ES has retraced 20% of the decline, which is a start, but is hardly "technically significant," and qualifies as a relatively shallow bounce off of the lows.
If the decline off of the two June highs at 2119.75 and 211.50 (June 8 and June 23) represents a big double top, then only a climb that pushes up through 2065 on a sustained basis will meaningfully compromise the otherwise still-developing major top formation.
Key, heavy resistance along the road to 2065 resides at 2020-2025, and then at 2060-2065, which we need to watch closely for signs of either recovery exhaustion/reversal, or upside penetration/acceleration.
Meanwhile, as we discussed on Monday, sympathetic oil weakness managed to hold its prior pivot low exactly at $45.83 prior to turning up for a run above key initial resistance at $47.00, which has been extended up to $47.60/70 in overnight/morning trading.
A sustained climb above $48.80 is needed to trigger stronger bullish signals that will point to a test of the June 22 high at $50.54.
At this juncture, failure to sustain Tuesday's gains followed by a decline and close back beneath $46.80 will compromise the timing of the next upleg (to $53.00-$54.00).
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