Russell 2000 60 min Chart
This chart is the Russell 2000 hourly chart. It reversed hard off of a tight harmonic resistance zone yesterday and has a beautiful bearish divergence on the hourly technical indicators. The daily chart has the look of a small head and shoulder top pattern developing with the neckline at 785 and the high at 850. That implies a possible 65 point move below 785 if the markets were to break down from here.
The daily charts of the the SPX and DJX touched the upper bollinger bands yesterday as well and then reversed. All the gap down of the move down since early April have been filled. The daily technical set-up is solid for a retest and failed breakout of the April high.
I believe the odds favor a resumption of a corrective decline from this point.
The EUR/USD has reacted strongly downward from the end of a possible triangle pattern on the daily chart as highlighted in the previous post. Further declines there would pull commodities down and likely correlate with falling stock prices as well.
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