ES Update

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We have a ST trendline resistance breakout working here as we watch to see if ES can push above the VST and ST range top at 2072.75.   If that happens it would break the recent ST bearish pattern of shallow lower highs and lower lows.

The current upside run originated at the stop sweep/reversal play under 1990.75 that bottomed at 1983.25 on December 14th.  There was an initial pullback to retest that stop sweep breakout level on December 18th (which also set up the current range top at 2072.75)  and it has been a push higher to challenge, and now overcome, the trendline resistance drawn from the recent lower pivot high.

After today we have two more trading days left in 2015–and, interestingly, those will determine what the headlines say about the market gain (or loss) for the entire year!  ES closed at 2020.25 (adjusted for continuous contract pricing) in 2014, so that is the year-end line in play.

The premium strangle maneuver that I pointed out going into OpEx is over now–so there is likely no reason for the pros to smack down any more upside breakout attempts.  If I were pulling the levers, I think I might be tempted to blow through the bear stops at 2072.75 and then 2087.75 and slingshot toward the next IT resistance target at 2102.50 on that momentum.  From there, new all-time highs above 2109.25 would be just around the corner–but first things first, and that means watching to see if the ST bearish trend of lower highs can be snapped with a push above 2072.75.

ES has been oscillating around the ST and IT primary trendiness (2004 and 2017.25) for months.  With OpEx behind us–it could be time to finally move out of this boring range strangle–so head’s up here near 2072.75.

…my .02

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ES Update

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ES 1990.75 continues to be the bull/bear line.  Assuming that today’s low stays above the provisional low at 1983.25, which was created on a stop sweep/reversal at 1990.75, then the daily bar range chart setup should look like the chart above at the close today and shows the new ST trendline support where the current buyers are staking their bets.  If we see a reversal of early gains and a breakdown below 1983.25 …then the bears would be back in control and I will need to redraw the chart above.

With OpEx now concluded, we could see the shackles come off the recent contracting range strangle on the market due (in my speculation) to pros having sold calls above and puts below (as explained here in recent posts).  As usual, the option writing pros made a killing on the play–and so now we move on to the next act of the show.

The next date to watch is the end of the calendar trading year on December 31st.  The 2014 ES close was at 2020.25, adjusted for continuous contract pricing, so keep that in mind as we hover just below–currently at 2011, as I type.

…my .02

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FOMC Day

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Today we get the FOMC Meeting announcement at 2 pm and that should set up whatever silliness the pros have planned into year-end OpEx on Friday.

 

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Next VST resistance targets above are at 2057.75 and then the descending VST trendline currently near the 2064 area.  Compressed trading range tops would be next at 2087.75 (VST), 2097.25 (ST), 2102.50 (IT), and 2109.25 (LT)

The stop sweep/reversal at 1990.75 set up the most recent provisional low at 1983.25 and that becomes the bull/bear line going forward.  Downside targets underneath that line are: 1974.75, 1976.25 (open gap on daily bars), 1956.50, and then 1943.25–which lines up with rising intermediate trendline support.

The ongoing theme going into OpEx has been sideways meandering within the ST range.  The center of that ST range is at 2044 ((2097.25 – 1990.75)/2 = 2044)…which is where price is at as I type.  Gosh, what a surprise!

Let’s see if the announcement shakes things up–or if they continue compressing into OpEx.

…my .02

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ES Update

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ES has been working lower since 12/7 as we near the much anticipated FOMC announcement on Wednesday at 2 PM.

The pros have now broken the downside of the ST range so that guarantees a lower low to go with the lower high set on 12/2 at 2097.25 and joins the VST in a downtrend (under 1990.75).  As always, the old ST pivot low at 1990.75 should now be watched for signs of a stop sweep/reversal play–and that becomes the new bull/bear line right here.

The chart above shows the next major downside target at the open breakaway gap of 1976.25 from 10/14/15.  If ES fills that gap and it doesn’t stop the push down –then the rising IT trendline support would be the next major target.

The bulls are being abused by the pros ahead of the FOMC announcement.  Hard to say at this point what that means in terms of the likely coming ambush around that event–but let’s keep an eye on what happens right here around the two targets mentioned above (the bull/bear line at 1990.75 and the gap at 1976.25).

…my .02

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Option Rollover Day

Volume shifts from the December 2015 to March 2016 futures option contracts today with a difference of –7.75 points from ESZ15 (December) to ESH16 (March).

All previous chart numbers have been adjusted to reflect the new contract pricing—so, for example, the intermediate-term primary trend line from the expiring December contract at 2025 now becomes 2017.25, and so forth.

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The old VST range bottom at 2032.25 (2040 on December contract) didn’t hold up–so we are still looking for a ST higher pivot low to eventually form, ideally above IT primary trendline support at 2017.25 in order to eventually flip the multi trend rating back to a Bull 10.

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As you can see by the embedded rectangles on the daily bar range chart above and echoed in the Stops and Targets summary tab…this continues to be a rangebound market in all three major timeframes.  We are still waiting for the VST to settle after a downside breakout yesterday followed by a stop sweep recovery back inside the old range.  The VST trend has a pattern of shallow lower highs and lower lows –but sellers won’t return unless price drops back below 2032.25.  Yesterday’s low now at 2026.50 becomes the new VST provisional low–and the 5 day (short-term) cycle clock is reset.

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Next VST upside targets are minor resistance at 2057.75 and then the descending VST trendline currently at the 2076 area.  Next targets lower would be IT primary trend line support at 2017.25 and then ST at 2004

Today’s rollover is the first of three key dates to watch…followed by the FOMC rate announcement on December 16th and then year-end OpEx on the 18th

…my .02

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