Yesterday’s futures move on a sustained buy program appears to have been the mirror image to the last sustained sell program that was run on May 20th. The minimum objective likely was to run all bears who entered on the break below 1104 on May 20th (see red arrow on chart on that date) back to their stops–and that minimum objective has now been accomplished.
Yesterday I posted a target at 1107 on the chart, which was hit this morning and price is presently hovering just below. That line can serve as an early intraday bull/bear line today.
Stops and targets defines the present macro trend for ES as follows:
▼ E-Mini S&P 500 Futures Option [Jun 10] is rated Bear 3, the second stage of an intermediate pullback within the context of a long-term bull market. The number that must be taken out to move to the next level of bearishness is long-term trend support at 1,083.00. In a continuing long-term bull market, buyers will typically step in at or near that number—but in a strong reversal sell-off that long-term support will eventually fail as sellers anticipating lower prices and the start of a long-term bear market emerge.
The 1083 hard deck lines up nicely with the light gray VST support trendline that I have drawn in on the chart above. VST bull stops are likely just under there and that is the first objective that bears would have to take to start to turn this back down.
Big profits have been locked in on bearish partials for S&T ideal trades over the past few days and the way that the trend following game works is to just continue peeling back layers to take profits as new cover signals are generated by S&T, but to put the trending trades right back on when the trend reasserts. The core positions ride the countertrend rallies/pullbacks until the primary trend lines are stopped and reversed.
IT trend is down < 1140
ST trend is down < 1121
LT trend is up > 1083
Intraday VST bull/bear line is at 1107 and the countertrend rally continues in IT and ST above 1083 with the LT stop/reverse sitting at that same line. As the S&T multitrend rating paragraph points out—the big picture all continues to hinge around that LT primary support trendline.
(click image to enlarge chart)
I had a request yesterday to please explain what I meant when I said that ‘the LT primary trend channel remains intact from a weekly bar perspective’.
The chart above shows a weekly bar chart with the LT trident channel drawn in dark green. The recent low was nearly a direct hit on the bottom channel line (though it was slightly exceeded on the more finely tuned intraday chart).
The weekly chart points out the current bull case nicely, in that we are seeing a rally after a pullback to the bottom of the trident channel and that lines up with the S&T assessment of Bear 3 as shown above.
So long as those recent lows remain intact, the weekly bar picture remains bullish.