ES Update

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Yesterday’s gap and go took out 58 trading day’s worth of bull stops!  There is simply no defense against that sort of premarket gap takedown, and the pros have the bulls in a calculated squeeze here–while simultaneously daring the bears who were not counter-trend short ahead of the takedown to initiate short trades deep in the hole.

The pros poked just under IT range support yesterday at 2049.25 and we are watching in the early going to see if that line can hold to set up an IT stop sweep/reversal play.

Yesterday’s low at 2047.25 is the new bull/bear line for today–with the same setup as yesterday (at 2054).  Intraday action is bullish above and bearish below that line.

If that provisional low at 2047.25 were to be taken out without a reversal, the next target lower will be 2025.75, which is the current minimum pullback target for a potential higher LT structural low.

The stop ledge I pointed out just under 2023 would be next.

This market has been in desperate need of a reset for some time and once the Russell 3000 rebalancing was over…they yanked the rug–and make no mistake, that move yesterday was entirely premeditated and brilliantly calculated.

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In the early action, ES is trading between IT support and ST resistance.  Bears would like to see 2061 hold as resistance and 2049.25 support fail, whereas bulls would like to see 2049.25 hold as support and 2061 fail as resistance.

The pros are just watching the order imbalances and pondering their next move.

ES 2047.25 is the line in play…bullish above, bearish below.

…my .02

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ES Update

We got a little excitement overnight in the futures–with ES down as much as -41.50 points, for a provisional low of 2054

So, let’s take a look at ES starting from the monthly bars and working our way back in for the proper perspective…

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Screen Shot 2015-06-29 at 9.26.29 AM

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This month is almost finished, but so far June is painting an inside bar.  The May low was at 2049.25 and that would be the big number to keep an eye on if we were to get a break below the overnight low at 2054.  It has been seven months since a previous monthly low was broken, so if that were to happen then it would definitely be an eyebrow raiser.

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The weekly bar chart gets a little more interesting…

This is the Obama paradigm ‘roadmap’, and we can see something a little different going on here recently.  The red and green dots represent four bar pivots–and that is what I am keeping a close eye on.  During the recent stall in momentum, we saw three consecutive pivot highs form–but we are still waiting on the next higher pivot low to form in the ongoing sequence, which is very extended from the last higher low at 1946.25.

As I have pointed out in previous posts, ES 2061 was a candidate for a new higher pivot low–but that got taken out on the gap overnight, so now we reset that cycle clock and keep a close eye on what happens next.  The overnight low at 2054 now becomes very important in the coming days.  If they can hold off additional selling then eventually, that could become a new higher low in the sequence–but we will need to watch very carefully how the pros deal with this gap.  If we do get more downside–I have left that ledge at 2023 marked as a location for a potential stop trove raid.

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Zooming in to the daily bar/range chart we can see that the pros popped and reversed on the ST/IT trendline support again after running stops just under the short-term range bottom.

The breakaway gap to be filled is at 2095.75.  Underneath, the intermediate range bottom is at 2049.25, and that is the line that would have to be broken to draw in a new round of sellers.

As of today, the minimum pullback target to set an eventual higher long-term low is at 2025.75, but that will start to ratchet higher in the coming days.  Again, it’s hard to ignore the potential for forcing sellers under the ledge at 2023, should the pros decide to take this down for a much-needed reset.  Rising long-term trendline support is currently near 1985, and we know how the pros love to break those trendiness and then reverse.

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Moving in closer to the hourly bars…

We can see two consecutive opening gaps at 2105.25 and 2095.50.  Breakaway gaps show intent by the pros and clearly they are pushing it down on purpose.

It should be noted that today is the first day that the new reconstituted Russell 3000 index trades.  Some of the deepest pockets and also easiest to abuse–are the funds who track the indexes.  Those managers are forced to buy and sell around rebalancing–and so why wouldn’t the pros hold the market up to sell to them at nosebleed prices?  The financial media wants you to focus on tiny little Greece, of course.  😉

The intraday bull/bear line is the overnight low at 2054.  So long as that holds, we have a stop sweep/reverse play and all trends remain up above the ST range bottom, which aligns closely at 2061

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Screen Shot 2015-06-29 at 10.03.58 AM

.Looks like I am on the same page as Stops and Targets (see blue highlights on the screen capture above).

Fine tuning to hourly bars–it’s all about 2054 (overnight low) to the downside and 2095.50 (gap fill) to the upside.

…my .02

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Options Expiration Day

Today is June quadruple witching for options…

To make a point about just how ridiculously predictable the pros have become, I would like to present the following two charts for consideration.  The first one is from the last quadruple option expiration day on March 20, 2015 and the second one is from today.  You be the judge…

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Last Op/Ex March 20, 2015

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Screen Shot 2015-06-19 at 9.27.34 AM

Today

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The FOMC/OpEx trading setups are virtually identical.  They suck in bears ahead of the FOMC statement and then run the stops afterwards into expiration.  It is what it is, and so we just continue to go with the flow.

As I pointed out yesterday, ES 2113 is the first chance for flameout and apogee after the stops have been run.  If there are still enough potential forced buyers remaining above then the next target higher are the stops > 2126.25, otherwise the first target below is confirmed support at 2106.75.

The last confirmed spotter signal from 5/19/2015 is now officially an IT top and it achieved it’s minimum goal of setting a new higher IT pivot low, as has been explained in previous posts.  That IT high at 2126.25 is the next key line in play as we watch to see if they break into a new higher range and raid the last remaining bear stops–or if we get another rug pull once Op/Ex is concluded.

Intraday, ES 2113 should work as the bull/bear line as the pros maneuver single issue options into the most beneficial configurations (for themselves, of course).

…my .02

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Have a nice weekend everyone…

 

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ES Update

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The oh-so-predictable post-FOMC ‘heads we win, tails you lose‘ jam into the bear stops is currently underway.  The pros have now nuked all resistance short of new highs > 2126.25, so the weekly paradigm that has been in place since 2009 continues to work, and 2061 was the key line indeed.

We now have a new VST (very short term) higher low (2162) and a VST higher high (> 2106.75) in place–so trending momentum is back in the bull’s court again after that key ST line at 2061 held on the pullback to 2062.

The first place for a potential apogee on the day could be right here just above 2113 when the second level of close-in stops are finished being digested–unless they keep going for the last bear holdouts, who would have stops resting just above 2126.25.

First counter-trend sell for VST traders would come on a cross back under 2106.75 potentially targeting the gap at 2082.50 first–and then confirmed support at 2073.50, if we were to get a deep pullback after the stop running ends.

All trends remain up > 2062

…my .02

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FOMC Announcement Day

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Today at 2PM ET we get the FOMC announcement and forecasts, followed by Janet Yellen Live at 2:30.  Everybody is waiting to hear when the Fed will decide to start hiking interest rates and we could get a ‘head’s we win, tail’s you lose’ kind of scenario whereby if they announce a rate hike the lapdog media will extoll the ‘strong economy’–and if the Fed holds again, as is expected by most, then we get a sigh of relief.  Potential is there for a positive news spin either way.  Crazy the way that works, huh.

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Screen Shot 2015-06-17 at 9.47.56 AM

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Yesterday the Stops and Targets ST primary trend line moved up for the first time in two months.  It just barely budged from 2056.75 to 2061–but hey, it finally moved.  That ST primary trend line remains the key line in play and as I pointed out yesterday, the pros came in to defend it and rallied from 2062 after the engineered overnight takedown.

On the daily bar range chart above I have adjusted the ranges for both the ST and IT to reflect how it will look after the close today.  Barring something extraordinary happening–that will be the new macro configuration.

So, let’s dig in a little more to explore the possibilities here…

Clearly, the market has been languishing in a slight sideways/up pattern since the March low at 2023.  Yeah, it’s been up–but momentum has stalled and we now have an (almost) intermediate range built between 2049.25 and 2126.25.  The bears have been in control since the May high but haven’t been able to do much damage–as both the IT and ST range bottoms have moved up.

On the chart above you can see that we have a series of lower highs in the VST timeframe and the dotted red trendline shows where professional bears are likely trailing stops as they wait to see if the market can ultimately break support.  A price move above that descending trendline would start the covering.  A further move above 2106.75 would paint a new higher VST high and momentum would shift back to the bulls.  So, for the immediate future let’s use the VST range top and bottom between 2061 and 2106.75 as the triggers for a momentum signal.  As I mentioned above, a move above would start the bears covering–but what would happen on a surprise move below?

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Screen Shot 2015-06-17 at 10.10.28 AM

IT and ST primary trend lines have moved up–but take a peek at the huge gap under 2049.25 on the screen capture above from Stops and Targets.  That’s a pretty long ways down to LT support.

So, the question then becomes…what would it take, at minimum on a pullback, to eventually set up a LT primary trend line advance?  The answer to that question, from today’s levels, would be a push under the March low of 2023.  If the pros wanted to yank the rug, there is a case that can be made for just such a pullback to reset this market…and guess where the pros left a huge stash of stops just beneath?  Yep, that head scratcher back at 2023.  Not saying’ that’s what they are planning here…but it would become a very good thesis if they were to take out the key line at 2061 and then 2049.25

So, something to ponder as we await the next push out of this range after the FOMC announcement.  To the upside are bear stops above 2106.75 and then above the IT range top at 2126.75.  A squeeze up is what we have all become conditioned to expect…but underneath, things could also get interesting if the pros decide to take out key support and possibly take a run at 2023.

It’s all good for bulls > 2061, and gets a whole lot better > 2106.75…but just in case this takes a hard dive out of this range-be ready to react under 2061.

…my .02

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