S&P 500 Futures Update

Stops and Targets S&P 500 Futures
Stops and Targets S&P 500 Futures Summary

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The week has opened with a gap down (note the dashed blue line on the chart above showing Friday’s close).  As I pointed out in my last post the S&P 500 Futures are now short-term bearish under 2351.

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S&P 500 Futures short-term strategy
S&P 500 Futures short-term strategy

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Stops and Targets is showing the next support lower at 2296, but price is currently outside of the ideal entry zone (2337.50 to 2351) for short trades.  Note how the pros gapped below that 1:3 risk/reward ratio range, which means they have an advantage here on the short side over those who missed the entry late last week.  That advantage allows them to squeeze any new shorts who entered late in the current session, so that is important to understand.

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S&P 500 Futures Daily Bar/Range 3-27-17
S&P 500 Futures Daily Bar/Range 3-27-17

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Looking at the Daily Bar/Range chart, we can see the short-term bearish channel (dashed red lines) I pointed out in my last post.  Price has lost the support of the center of that channel, which has been guiding the action since the election night low on November 8th.  That is a significant development –so long as price remains below that centerline.

The descending bottom rail of that channel is currently aligned with the open gap at 2309.75, which is the next target lower.  There is now an open daily bar gap above at 2344.75, as well.  That would be the ultimate bounce target off the overnight low at 2317.75 if the pros decide to give up the advantage of the overnight move, which they would likely do only if there are significant numbers of new bears who chased this move at the open…who automatically become forced buyers (to cover) at higher prices.

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S&P 500 Futures hourly bars
S&P 500 Futures hourly bars

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Moving in to 60-minute bars, we can see that ES is currently challenging VST (very-short-term) resistance at 2332.25.  The VST trendline break was at 2337 and  the hourly bar breakaway gap is just above at 2342.75

Though I absolutely loathe Congresscritters infesting both wings of the uniparty vulture with equal gusto–the Republicans truly are the party of stupid.  That foot-shooting maneuver on healthcare last Friday was a real face-palm moment and is likely the news driver of this current market hiccup.  I pointed out recently that the market configuration has been vulnerable to a news-driven event and the debacle on Friday certainly casts some uncertainty about whether President Trump will be able to drain the swamp in DC as he has promised–and thus casts doubt on whether the market-anticipated advantages of a pro-growth and pro-jobs government can actually be realized.

For today, let’s keep an eye on the resistance targets I pointed out above: right here at 2337 (VST trendline break) and then the hourly gap fill at 2342.75.  Of course, the really important number is the short-term primary trend line at 2351.

You have to understand how the pros think and operate to get what is going on here…they created an advanatge for themselves with the opening gap–so odds favor that they will resume the pullback once the late-to-the-party bears have been squeezed out.  That all changes if we get a move back above 2351, however, so lets see how it goes for this bounce off the lows today.

…my .02

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S&P 500 Futures Options Update

S&P 500 Futures Option Daily Bar/Range chart 3-22-17
S&P 500 Futures Option Daily Bar/Range chart 3-22-17

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Stops and Targets: symbol @ES 3-22-17
Stops and Targets: symbol @ES 3-22-17

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On Friday the S&P 500 Futures Options short-term stop/reverse line moved up to 2351, locking in huge gains since the election day bottom spotter at 2020.25 and the last major stop/reverse buy signal at 2092.

Yesterday we got a sharp pullback that broke that short-term trend support and has thus far turned the short-term trend bearish under 2351.  In the pre-market session price bounced at 2332.25, exactly at the center tine of the intermediate-term channel (shown as parallel dashed green lines on the chart above) that has been guiding this market since the November 9th low.

Let’s use that line at 2332.25 as an intraday bull/bear line to see if this is just a stop sweep under short-term support and a bounce off that center line.  A move under the current pre-market low of 2332.25 would next target the bottom rail of the red short-term bearish channel, whereas a move back above 2351 would be a short-term stop sweep/reversal.

So, bottom line…short-term is now bearish below 2351 but we could see a bounce here off the rising intermediate-term trend channel centerline at 2332.25.  If that bounce fails to materialize then next targets lower are: an open gap at 2309.75, and then a confirmed support target (see Stops and Targets screen capture above) at 2296.50.

A move back above 2351 would flip the short-term trend back to bullish.

…my .02

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Interesting Week Underway

Economic Calendar
Economic Calendar

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We have a potentially interesting week underway…

Today starts the 2-day FOMC meeting and tomorrow we get the royal proclamation–with another rate hike expected.  There are some rumors that the Fed may try to accelerate rate hikes going forward as a way for the global socialists to try to impede President Trump’s nationalist agenda (and the current bull market).  Many will be listening intently to the post-announcement Fed-speak tomorrow for clues.

Speaking of nationalists versus globalists…Wednesday evening might also be interesting due to the Dutch elections.  Geert Wilders is in the crosshairs of the entire globalist establishment including all of the same folks trying to take out President Trump.  If Wilders is elected (against an all-out onslaught to stop him) it could be a big market-mover as the EU would inch one step closer to eventual extinction and the caliphate’s worldwide conquest ambitions would take a big hit.

There are also rumblings of a new Wikileaks file drop coming soon possibly in advance of uber-globalist Angela Merkel’s visit to Washington DC, which has just been rescheduled to Friday…the same Friday when quadruple witching occurs in the options markets.

So yeah, this week certainly has some potential from an ‘events’ standpoint.

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S&P 500 Futures Options Daily Bar/Range chart 3-14-17
S&P 500 Futures Options Daily Bar/Range chart 3-14-17

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The very-short-term (VST) range bottom for the S&P 500 Futures (ES) is now at 2351 (see shaded gray rectangle on the chart above).  If that support line can hold for the next few days it could become a higher short-term (ST) pivot low, which would move the stop/reverse line up from 2248.75 and contract the very-wide short-term trading range.  Next targets higher are the open gaps at 2371.75 and 2378.25 and then new highs above 2398.

If, however, price drops below 2251 we will see selling programs start to come in.  Next target lower would be the center tine of the powerful intermediate-term bullish channel (flanked by dashed lines on the chart above) that has been guiding price since the Trump election in early November.  If that centerline failed to stop the selling, the next target lower would be the open gap at 2309.75 and then short-term confirmed support at 2296.50 just below.

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Stops and Targets S&P 500 Futures 3-14-17
Stops and Targets S&P 500 Futures 3-14-17

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Note confirmed support at 2296.50 on the screen capture above from Stops and Targets–and the resistance target at 2398.  Price is sitting in the middle and so new short-term trades entered here would have a poor risk/reward prognosis.

For daytraders…the bull/bear line is currently at 2351–market is bullish in all timeframes above, but would switch to VST bearish below.  The VST trading range here is between 2351 and 2376.25.  A breakout on either side would get attention from black box trading algorithms toward the targets I pointed out in the text above.  Otherwise, the market remains flat-lined and awaiting a jolt.

…my .02

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Options Rollover Day

Stops and Targets S&P 500 Futures
Stops and Targets S&P 500 Futures Summary Tab

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Today is March Options Rollover Day and volume shifts from the March 2017 to June 2017 futures contract with a difference of –3.0 points from ESH17 (March) to ESM17 (June).

All previous chart numbers have been adjusted to reflect the new contract pricing—so, for example, the short-term primary trend line from the expiring March contract at 2251.75 now becomes 2248.75, and so forth.

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I have redrawn all my charts to reflect the new contract pricing…

 

S&P 500 Futures Monthly Bars 2017-03-09 at 9.42.47 AM
S&P 500 Futures Monthly Bars

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It’s all good on the monthly chart above the February closing price of 2359.75.  The wave 5 projection target at 2517.25 which seemed crazy to some folks back in October, now looks doable with perhaps some additional wiggles on the way if the present trajectory is too steep.

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S&P 500 Futures Weekly Bars
S&P 500 Futures Weekly Bars

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The market has been on a tear since the election of President Trump in early November–and has extended quite a bit from that overnight election day low of 2020.25, which is the current hard deck for the weekly bar roadmap paradigm that has been in place since 2009.  Eventually, we should see a pullback that builds a new 4-bar higher pivot low on the weekly chart.  The minimum pullback target as of today sits at 2278, but as time goes buy that target will rise–especially if we see a sideways consolidation.

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S&P 500 Futures Daily Bars
S&P 500 Futures Daily Bars

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On the daily bar/range chart, the short-term range is currently very wide.  We now have the minimum pullback in place at 2355.75 for a potential short-term higher low.  There is an open gap above at 2378.25, which should be the next upside target if 2355.75 holds here.

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S&P 500 Futures Hourly Bars
S&P 500 Futures Hourly Bars

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The bottom of the very-short-term range is at 2346.50.  It would take a move under that line to bring in sellers.  If that were to happen there is a big support gap underneath–with the next confirmed support target way down at 2296.50.

So, it’s all good here for bulls above 2346.50 in all timeframes.  A move under that line could get exciting, though, so that’s the intraday bull/bear line to watch.

…my .02

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President Trump and the Stock Market

Last night President Trump delivered his address to a joint session of Congress.  If you haven’t watched it yet, then you definitely should.

I wrote a post here around the election time with my opinion that President Donald Trump is a unifier and has the unique ability to flip his detractors and to grow his allies.  We saw those very rare attributes on display for all the world to see last night in a speech that was brilliantly written and perfectly delivered.  It is hard to argue, as an American citizen, against the vision he is outlining.  Who in their right mind doesn’t want a safer and more prosperous country?  Also, aren’t we all growing weary of the constant negativity of the anti-American globalist shills?  Just as Reagan made us feel good about being Americans again, so too is President Trump systematically breaking down the divisiveness, negativity, and engineered hatred–while encouraging us all to focus on the job at hand, join forces, and to get to work.

From the transcript of his speech

Everything that is broken in our country can be fixed.  Every problem can be solved and every hurting family can find healing and hope.  Our citizens deserve this, and so much more – so why not join forces to finally get it done?

The result?  S&P 500 Futures Options are up over 20 points at the open of the markets!  This upward blast of optimism coming in a stock market that hs already gained over three trillion dollars in value since this man’s election on November 8th!

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Let’s take a look at the S&P 500 Futures Options to see where we are today…

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S&P 500 Futures Options Daily Bars/Range Chart
S&P 500 Futures Options Daily Bars/Range Chart

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Nothing has changed technically since my last post (except for the upside breakout of the old short-term trend channel), so I will defer to that for specifics across timeframes–but take a close look at the intermediate channel on the chart above (marked by ascending parallel green lines with a dashed center channel line)…

The market has been riding inside that larger channel and bouncing off the center dashed line since election day.  The rising top rail of that channel is currently at the ES 2439 area, with the last price, as I type, at 2387.50.

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Stops and Targets ES summary 3/1/2017
Stops and Targets ES summary 3/1/2017

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Stops and Targets ES short-term 3/1/2017
Stops and Targets ES short-term 3/1/2017

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All trends are up above 2251.75.  First counter-trend sell signal would come on a move under 2299.50 (short-term upside breakout on February 9th).

I am keeping a close eye on bullish percentages on the Stops and Targets end of day Signals Matrix Summary.  Exhaustion of a move like this tends to come when bullish percentages are around 80%.

I am also keeping a close eye on Spotter Signals.  Even the slowest learners out there now know with absolute certainty what we Stops and Targets users have all known since the last long-term trend change on the S&P 500 Futures Options way back in 2011 and that starts to change things once the herd is all gathered on one side of the boat.

From Stops and Targets:

The long-term trend for E-Mini S&P 500 Futures Option turned bullish at 1,040.25 on November 28, 2011.  Net change to date is +1,345.75 (+129.37 %).  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 2,023.25

Once everyone is all-in and the buyers are eventually exhausted then we will see an inevitable pullback–perhaps even a significant one since the market is so far extended currently.  But, make no mistake, this is a secular bull market and all dips will be bought.

I told you this was going to be FUN!   😉

…my .02

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