ES Update

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Today is the last trading day of 2014.  I have shaded the last 12 months on the chart above to show at a glance what 2014 was all about from a trader’s perspective.  An amazing five out of the last twelve months were outside bars–so there were plenty of stop sweep/reversal opportunities in 2014 and we identified all of them right here.  😉

The November monthly bar is what has been in play recently…

The last big stop sweep/reversal move was into the stops under the November low at 1988.50 followed by a scorching squeeze back above the November high at 2068.50, which is where the unfortunate bears who missed the turn at the reversal above 1988.50 have been pinned since 12/19

The pros have had price locked in a tractor beam since the post-election/pre-Christmas year-end bonus sweetener play ended.

The last item on my recent checklist was a higher close on the December bar than November’s 2059.50.  Let’s see if we get that today-although at this point, they have likely squeezed about as much as they can from the year-end move.

Counter-trend traders love to use the prior close as an entry trigger, so if we were to get selling today 2059.50 would be the line to watch.

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Moving in to the hourly bars to fine tune things a bit…

First support underneath current price is at 2072, then there is an open hourly bar gap at 2063.75

The last ST pivot low is way down at 1961.50, so at some point we are likely going to need to see a higher ST pivot form.  The recent sideways tractor beam action makes the minimum ST pullback requirement just 2071 from the current price.

For today, anything above 2059.50 is a yawner

We’ll take a closer look at the configuration and trading setups after the New Year, once this year-end bonus pinning is completed.

Happy New Year!

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ES Update

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Pro checklist for December…

1) Squeeze bears to capitulation above November high (2068.50) after election setup (check)

2) Start dumping on a countertrend reversal at 2059.50 November close (check)

3) Take out all bullish stop levels down to support void at 1961.25 (check)

4) Accumulate dividend paying stocks at bargain prices at lows of move (check)

5) Use FOMC silliness to mask futures arbitrage intervention (check)

6) Retake 2059.50 to end December monthly bar positive (maybe)

 

Pros should be off the short side and pushing on the long side now if the stop sweep/reversal hypothesis at the November low (1988.50) holds up.

Next upside resistance is at 2041.50 and then we have the descending top rail of a bearish trident channel at 2055 area.

I have drawn in a light green bullish trident channel on the hourly chart and bulls should be okay on any pullback that remains above that bottom rail.

Tomorrow is December OpEx and Quadruple witching.

Sometimes you have to step back and give a little golf clap at the absolute ruthlessness and brazen tactics of the pros.  This latest election/year-end strategy was very good indeed.

…my .02

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ES Update

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Today, starting  at 2 pm, we get the FOMC dog and pony show complete with a press conference

We have a monthly outside bar in place and ES has been driven down to near the last ST support (1961.25) before a large support void would open down to 1875 area.

As I pointed out in my last post, November’s low at 1988.50 is the bull/bear line to keep an eye on here.  The pros are fresh out of ST downside targets after 1961.25 and VST targets after 1952.50–so unless the plan is to morph this into an IT pullback, this is the area where one might expect some churning if they double up buying to first cover and then reverse.

If we get a bounce, bears would start covering > 1988.50 and then on a breakout of the descending channel, which is currently about 1998.

A lot of pressure is being exerted on the bulls here–and we have seen a squeeze into the FOMC silliness in a mirror image of what it has been recently (where the bears usually got screwed ahead of announcements).

This is a very curious market here, but it has been hitting all the S&T trade setups like clockwork and we are currently working down from 2007.75 looking for 1961.25, which was barely missed on yesterday’s low at 1961.50

…my .02

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ES Update

 

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One of the most ruthless moves the pros can make is an outside bar–and that is what we have working currently on the December monthly bar…

November’s range was 2068.50 to 1988.50 (with a close at 2059.50).  The December range so far is 2072.25 to 1974.50.

So, first we got a bearish stop sweep/reversal above the November high and today we have the opposite side bullish stop sweep and a potential reversal setup under the November low.  Of course, it remains to be seen whether they will reverse…but 1988.50 now becomes the new bull/bear line going forward.

Now we watch to see if the ‘invisible hand’ cavalry will show up once the pros are finished with a double round of equity buying…first to cover, and then to accumulate.  If they don’t reverse here around 1988.50, the next ST target lower is 1961.25

Remember, the SPY goes ex-dividend this coming Friday with an expected payout of $1.11/share and early assignment often occurs a day earlier–so short-sellers beware as those dates approach.

…my .02

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ES Update

 

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Yesterday was a wild one…but after all the smoke and subterfuge cleared–the daily high and low (2049.50 – 2017) were both inside the previous day’s range (2053.25 – 2016.50).  The net result of yesterday’s action was to flush the bears who sold the break of the 12/8 daily bar low at 2047 and then to trap the day-trading bulls, whose stops were congregated under 2016.50.  For those who were bemoaning a lack of volatility recently–this is what happens when the cooped up genie finally comes out of the bottle.  🙂

As I suspected, the pros were still pushing on the bearish side and we are now getting very close to the major S&T support target at 2007.75 that I have been pointing out.

Under 2007.75 is a void down to 1988.50, which is the November low.  If they were to continue down and break that low–that would be a significant event on the monthly timeframe and would result in an outside monthly bar, which would set up 1988.50 as a potential stop sweep /reversal candidate.

My recent trading outlook has been anticipating 2007.75, and I am looking to be very cautious on the bearish side from that point on.  There is a possibility that the pros might go for the November lows, which would be an absolutely ruthless move on their part if they do–but I would expect them to eventually cycle back into equities in time to collect YE dividends, as I pointed out yesterday.

Like I often say…first they bore you to tears and then when folks least expect it–whammo!

…my .02

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