The DOW & S&P 500 appear to be in topping mode. They both broke their respective uptrend-lines in October, then sold off, then rallied up to kiss the trend-line one more time, a likely goodbye for at least a while and perhaps for years, once a top is confirmed.
S&P 500 Index: The S&P tagged the upper Andrews Pitchfork resistance line as expected, and now it will likely sell off. Both forecasts are indicating a move lower now. Of course, it could always break out to the upside, but we will test the short side now. Unless we get a strong thrust up from here, expect at least a near-term top within 48 hours, and perhaps it's in.
ACTION 1: SELL short @ 1422.65 stop to open, use 1439.50 stop loss, move stop to break even @ 1411.70, exit 1/3 position @ 1400.70 limit, hold the rest for a potentially large drop. There are times to play it tight and times to let it ride. From now until it either breaks above 1442 and April, we may have some downdrafts that we wouldn't want to miss. Breaking 1442 on the upside negates the potential bearish setup for the time being.
ACTION 2: Get LONG again IF 1442 is broken on the upside, by using intra-day charts to pick a place to go long. However, between here and 1441.99, we will look for resistance and a short trade (see weekly and daily S&P charts below with a complete analysis).
DOW Index: The DOW has a 3 Rallies To a Top pattern within a "Wile E Cayote" wedge. You know, the kind Wile would find to drop something on the road runner. These have been some of the best patterns for big moves to the downside. They do not always work out, but when they go down, its an anvil drop from the sky you do not want to miss.
ACTION: Like the S&P500, a break below Wednesday's low may begin the sell off. We are open to one more thrust over the next 48 hours, but it could sell off at any time. Use the SP500 break of 1442 to the upside to negate a bearish stance here (see weekly chart below).
USDCHF: The Dollar-Swiss currency pair found support and had a little bounce so far. Breaking below Wednesday's low would mean a drop to the October 14th low of .9214, then a likely break and a drop to .8430 or much lower.
ACTION 1: SELL @ .9239 stop to open, use .9328 stop loss, move stop to break-even point @ .9190, exit 1/2 @ .8995. hold the remaining for a larger move to .8445 limit or lower.
ACTION 2: BUY @ .9470 stop to open, use .9370 stop loss, and hold for .9780 (see weekly and daily USDCHF charts below).