Intraday Charts Are On The Brink – Stock Market Trading Setup For Friday, Feb. 7

The Hurst 5-day cycle projection was at 3375 at the close in New York yesterday. We got a breakout above the old high and held. That narrow holding action continued through trading hours in Asia, and so far here in Europe this morning. But it is very much at an inflection point here at 11:30 AM (5:30 AM in New York).

Another point or two down and we’ll get a breakdown that will target 3300-05. But if they hold here, look out above.

Liquidity moves markets!

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Meanwhile, China continued its gap-fill action. The Shag High Composite has reached resistance at 2875. It looks headed the broken uptrend line at 2925. That would be a perfectly “normal” rebound from a technical perspective. Then we’ll see. A rollover from there could lead to a test of the low or worse.

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Meanwhile, to catch up on how this nonsense started off this week, click here.

As long as China doesn’t break, the US should party on.

Meanwhile, back on Wall Street, the S&P futures (ES) are holding on by the skin of their teeth as of 5:00 AM in Noo Yawk. Here’s the daily bar chart of the ES.

3333 holds the key. If it breaks, the trend centerline at 3320 would be likely support. If either of those levels holds, then the rally would resume and would target 3400+.

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Below is the S&P index (cash) hourly chart. That little green oval at the far right is where the futures have been trading this morning. Again, it’s obviously an inflection point.

The 5-day cycle oscillator has been falling since Wednesday. You could call it a negative divergence or you could call it an internal correction. That’s the problem with negative divergences. They’re not always bearish. It depends on whether the trend breaks. After the fact indicators aren’t much help now, are they?

If it does break, look for initial support and a bounce from the 3333 area. The futures just broke, and are already trading below that.

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