ES Update

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The market continues to go sideways here…

The consolidation since December’s ‘bonus rally’ has now produced a short-term trading range embedded inside of an intermediate trading range–with a constricting triangle between those pivot highs and lows.

The market ‘feels’ terribly bearish–but technically the bulls are winning this fight above 1970.25

Eventually we are going to get a breakout of this contracting range but for now patience is key.

This type of contracting range tends to draw in the protective stops–and the bulk of those stops are now sitting just outside of the IT and ST pivots with bear stops just above 2062.50 and 2088.75 and bull stops just under 1970.25 and 1961.50

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The paradigm since 2009 has been to constantly build higher pivot lows on the weekly chart.  The last higher pivot low was set at 1961.50 and as I have been pointing out–that is really the key line in play here.  Until/unless a last higher weekly pivot low is taken out to the downside and held–the game continues on.

The market could just as easily dip down as up from here and if 1961.50 were to be taken out–that would become the new bull/bear line with a watch on for the usual telltale stop sweep/reversal play that has followed the last five occurances.

Kinda boring lately, I know, but these are the type of markets that can really hurt traders who lose track of the bigger picture.

Patience

…my .02

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ES Update

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ES is still meandering inside the December bar shadow between 1961.50 and 2088.75, so not currently bullish but also not particularly bearish except for the monthly countertrend short play under December’s close at 2052.50–but we have no unanimous spotters in place…so we patiently await the eventual kickoff of the next adventure by the pros.

The World Economic Forum in Davos has concluded and today is the start of the first 2-day FOMC meeting of 2015.  Tomorrow at 2 pm we get that proclamation announcement.  Yippee!  Who’s excited?  Zzzzzzzzz (wake up)

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The daily bar range chart above shows the current macro configuration…

Long-term support is now at 1806.25, intermediate support is at 1961.50, and short-term pivot support is at 1970.25

The resting bear stops are sitting above 2062.50 and then 2088.75

In the bigger picture–this market is going nowhere from a trending sense, so long as the ranges above remain intact.

The VST range is 1970.25 to 2062.50…

(2062.50 + 1970.25) / 2 = 2016

So, ES is currently just splitting the difference here near the midpoint of the VST range at 2016–as we wait patiently for something interesting to eventually happen.

…my .02

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ES Update

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As I mentioned in my last post, the market really hasn’t gone anywhere since November.  The audacious stop running to pad bonuses in December created an outside bar–and January thus far has just been meandering inside of that 1961.50 to 2088.75 range.

I have marked every outside bar since 1999 on the monthly chart above using a blue dot.  Since 2009 there have been 8 monthly outside bars (five of them have come in the past 11 months).  In every instance since 2009 the high of the outside bar has been exceeded within the next two months.  The pros have not been shy about throwing money at the market to create the illusion of prosperity–and these guys have been nothing if not predictable in their zeal to prop the markets since 2009 using the futures.  I will address that ‘illusion of prosperity’ later in this post.

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On the weekly bar chart there are two important numbers to keep an eye on…

Long term trend support has now moved up to 1806.25 and intermediate trend support to 1961.50

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Those new trend support levels are verified in Stops and Targets, as well.

In order for the paradigm in place since 2009 to change we would need to see a break under those levels that did not immediately recover.

For those of you who have been long since the last Stops and Targets LT trend entry signal at 1102.75 in 2011, that means you get to move the stops up another notch to protect those amazing agains…

The long-term trend for E-Mini S&P 500 Futures Option (Mar 15) turned bullish at 1,102.75 on November 28, 2011.  Net change to date is +936.25 (+84.90 %).  The recommended strategy is to buy only when a favorable risk/reward ratio is present, and to sell partial positions to lock in profits as upside targets are achieved.  System trading bias would switch from bullish to bearish on a cross below 1,806.25

For those long since the last IT trend entry signal in October of 2014, those stops can also be raised to lock in gains…

The intermediate trend for E-Mini S&P 500 Futures Option (Mar 15) turned bullish at 1,875.50 on October 20, 2014.  Net change to date is +163.50 (+8.72 %).  The recommended strategy is to buy only when a favorable risk/reward ratio is present, and to sell partial positions to lock in profits as upside targets are achieved.  System trading bias would switch from bullish to bearish on a cross below 1,961.50

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The market is setting up for the next trending move here.  Odds favor a higher high within the next month–but all things come to an end eventually, so for now–the key support level on the weekly roadmap chart is 1961.50.  If that gets broken and does not recover then everybody needs to be ready to change bias–and quickly.  The pros like to get everyone comfy and complacent before a paradigm shift, so just remember that when the time finally comes.

We didn’t get unanimous spotter signals on the indexes at the recent local high of 2088.75, so I am less bearish here than I might be otherwise if we had spotter in place.

As with the monthly bar, the weekly bar is currently an inside bar between 1970.25 and 2051.75.  Nothing to get terribly excited about here on a weekly basis until that range breaks.

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Looking at the daily/range chart, what stands out to me is that the trendline support drawn through the latest IT higher low has already been broken.  Usually, when trendline support is broken that implies higher odds that the last low will be challenged.  Note also that this morning’s earlier high was a near back kiss off that broken IT trendline support–so that’s something to keep in mind.

The VST range is currently 1970.25 to 2062

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Moving in to the hourly bars…

Earlier this morning we had a rally underway that touched the top of the VST bearish trident channel and also lined up with a near back kiss of the broken IT support trendline mentioned previously–and of course, the ST primary trend line, which has been crossed 11 times during this meandering consolidation from the December year-end pillaging by the pros.

The VST bear stops are sitting just above that trident channel top rail for those of you who are trying to outgun the supercomputers.  Bulls can breathe a sigh of relief if that upper rail is broken and held–but until it is, those stops under 1970.25 are a potential target as we head into the coming week and the FOMC silliness.  They love to squeeze traders into the announcement–so we’ll keep an eye out to see which side gets it this time.

It is also worth noting that as you read this the global elite are meeting in Davos Switzerland to decide your future.  After the meeting concludes, we should start to see the next acts of the play they concoct unleashed upon the world.  Until the boss gets home, it appears that the trading desks have been told to hold the fort.

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<rant/>

As I alluded to in the opening paragraphs above–I do have one more thing to share regarding the ‘illusion’ of prosperity, which has been purchased by increasing the national debt to over 18 TRILLION dollars since the Obama administration assumed power.

During the State of the Union address we were told that ‘the state of the union is strong’.

Really?

Take a look at the stats and decide for yourself:

http://www.usdebtclock.org

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</rant>

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ES Update

Okay, let’s take a look at where we are on ES…

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Starting with the monthly bar we can see that January is currently an inside bar…meaning its high and low (1984.25 to 2067.25) thus far have been ‘inside’ the high low range of the previous bar (December), which was 1961.50 to 2088.75

Two numbers matter in relation to the current monthly bar configuration…the December close at 2052.50 and the December low of 1961.50

Current price action is counter-trend bearish under 2052.50 but it would take a move under 1961.50 to unlock a lower high/lower low sequence, which would be bearish and trending under 1961.50

As I warned earlier in the month, however, inside bars like this can be lousy trading markets for those trying to establish directional trades on tight stops.  The volatility is great for range traders entering at the edges–until the trend reasserts and those who are not disciplined and nimble will get torched.

So, bottom line here from a monthly perspective is a big sideways yawn until/unless one of those high/low/close numbers mentioned above is broken.

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Moving in to the key weekly ‘roadmap’ chart, the plot thickens a bit…

ES 1961.50 now becomes a very important number.  That was the key low set on December 16th, which could potentially become the next higher pivot low in the sequence–but only if this week can manage to finish trading without taking out that provisional low.

I have drawn in a trident channel that shows what the next target lower would be if 1961.50 were to be taken out, either immediately–or in the coming weeks after a bounce from current levels.

I have many times pointed out the importance of the weekly ES chart as a roadmap of the pro’s strategy and intentions since the current regime came to power in 2009.  We have to be especially attentive to the location of that last higher low and vigilant anytime that we get a push under that line.  The current paradigm will end when we get a break of the last higher low that is not reversed.

The current structural pivot is at 1806.25 (marked by the number ‘5’ on the chart above) and what we are watching for here is to see if 1961.50 can finish the week untouched to become the next higher low in the sequence.  If 1961.50 is taken out, then it would become the next bull/bear line as we would be watching to see where price would reverse to restart the cycle clock.

So, if I haven’t made my point clear yet–the big weekly prize here is 1961.50 but the next key line in play is last week’s low at 1984.25, which is where the short-term stops are located just underneath.  If the pros raid those stops, that line at 1984.25 becomes the intraday bull/bear line with 1961.50 then coming into play.

So, first line of defense for bulls is 1984.25 and that is our bull/bear line for today here at the bottom of the current ST range.

We don’t have unanimous spotters at the recent top–so it is unlikely that further selling from here would exceed the bottom of the trident channel–but for now, at least, the pros still have a wide path to the downside before they potentially run the risk of breaking their paradigm by taking out the last higher low (currently at 1806.25 but maybe moving to 1961.50 if the week can close with a low > than that number).

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Moving in to the daily bar/range chart…

The bottom trendline of the contracting triangle I pointed out in my last post was tested this morning and they dipped as low as they dared without taking out the new ST range bottom at 1984.25 before reversing.  For today, 1984.25 is the intraday bull/bear line.  The range traders bought in there and are now looking for a move back towards the other side of the contracting triangle (and hoping for an upside breakout).  The bull stops are now under 1984.25 and if that level were to be broken, we could expect selling, but keep in mind the bigger picture I pointed out on the weekly and monthly bars above.

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Lastly we have the hourly bars which help to fine tune the action inside the bigger picture explained above.  Intraday bull/bear line is at 1984.24 at the bottom of the ST range.  A sustained breakout above 2007.75 would next target the descending trendline of the triangle which is just above the S&T primary trendline at 2041.50.  A break below 1984.25 would next target 1961.50

Although there has been volatility inside the contracting range recently the market really hasn’t gone anywhere from a trending perspective since November and the audacious double stop run play on the December bar to pad the year-end bonuses.

Keep an eye on the weekly chart going forward–as we start to piece together clues for the next move by the pros.

…my .02

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ES Update

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As expected, ES continues to consolidate in a narrowing range as we watch to see if the pros will kick in a new higher ST stop under 1984.25 in the coming days.  That is the line in play and we need a couple more days before we will know if that will be the next higher ST low.  For now, the narrowing range is highlighted on the chart above by a triangle formed off the current VST trendlines.  Until we get a breakout of that contracting triangle range the market is just drifting and consolidating.

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This is one of those times where price is meandering back and forth across the ST primary trend line at 2041.50, which happens to be near the middle of the current ST range between 1961.50 and 2088.75.  If you are ST bullish, the better place to set a protective stop is under the bottom of the VST range (1984.25) to stay out of the whipsaw zone.

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So, while we are waiting for the triangle breakout, let’s take a look at a couple of other symbols…

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Gold has a potential stop sweep/reversal setup in play after taking out the last monthly pivot at 1178.90 and then reversing.  There is also a confirmed bottom spotter–so gold could be coming back to life here.  A move above the dashed grey trendline resistance (currently in the 1280 area) could bring in new buyers.

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The US Dollar has also been on a tear the past 7 months but is close to resistance here at 92.63 and so possibly a bit extended, which is in agreement with what the Stops and Targets trend analysis is saying.  The dollar has changed character recently from previous sideways consolidation (pinning by the pros) so it is worth watching to see what comes next.

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Last up is crude oil, which is in an induced freefall courtesy of the House of Saud.  Some have speculated that the Saudis were getting spooked at the North American shale oil competition and so this is an attempt to crush that opposition–and possibly even an attempt to force key players into insolvency, which is a old ploy in business to eliminate competition and then sometimes to create a future bargain as those troubled assets come on the market at distress sale prices.  In the short term we all get cheap gas, which is great, but longer term this is a brazen attack on America’s future energy independence–and so watch our politicians carefully going forward to see their true colors and to whom they bow their real allegiance.

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…and while I am at it, how about a short rant on the subject  🙂

Let’s start with an extremely astute observation by Joseph Campbell, which has held true through the test of time and history:

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“If you want to understand what’s most important to a society, don’t examine its art or literature, simply look at its biggest buildings.”
― Joseph Campbell

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So. let’s do just that by following this link…

http://skyscraperpage.com/diagrams/?searchID=201

By 2020 only two of the tallest 25 buildings in the world will be located in America and our tallest comes in at only 12th.  Take note who has the tallest buildings and let that sink in a bit.

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I leave you with the following images to further contemplate…

obamabows

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saudiOli

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‘keep your friends close and your enemies closer’

</rant>

…my .02