Intermediate Stop/Reverse Line

Stops and Targets @ES Summary
Stops and Targets @ES Summary

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Stops and Target @ES Intermediate
Stops and Target @ES Intermediate

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S&P 500 Futures Daily Bar/Range 4-27-2017
S&P 500 Futures Daily Bar/Range 4-27-2017

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The Stops and Targets Intermediate stop/reverse line has moved up to 2317.75 at yesterday’s close.  Barring something extraordinary happening between now and the close on Friday we will have the next higher 4-bar pivot low set on the weekly chart, which is a significant event.  Those with big gains on the long side should begin tightening trailing profit stops and continue to keep a sharp eye on ES 2317.75, which will become the new hard deck on our weekly paradigm roadmap.

The last bear stops are all congregated above the intermediate top at 2398.  That is the next upside target and if we are eventually going to see top spotters form then the market will need to get to new highs.  However, if ES does not get above 2398 there would be the possibility of forming the right shoulder of a bearish ‘M’ pattern in this area.  So, this is a key juncture right here.

…my .02

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S&P 500 Futures Options Update

It’s been a while since I have posted and for good reason…as I type, the S&P 500 Futures are at the same price.  This market hasn’t gone anywhere, but that might be about to change.

Let’s take a look at where things currently are by starting with the monthly bars and working back to the Daily Bar/Range chart.

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S&P 500 Futures Monthly Bars 4-17-2017
S&P 500 Futures Monthly Bars 4-17-2017

(click on image to enlarge)

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The month of April thus far has traded inside of the March range of 2317.75 to 2398.  Technically, this is a range-bound market with a bearish bias under 2359.25 from this perspective.  Keep that lower number of 2317.75 in mind, however.

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S&P 500 Futures Weekly 4-17-2017
S&P 500 Futures Weekly 4-17-2017

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The weekly bar chart above has been dead-on since 2009 for tracking buy zones in the ongoing paradigm.  The last stop sweep/reversal buy was at point number 9 (ES 2020.25).  Since that entry the market has opened up quite a range after a long run–so a pullback was expected.  There is an intermediate top in place at 2398 and the intermediate range is currently between 2020.25 to 2398.

What I have been expecting is a pullback from 2398 to create a new higher 4-bar pivot low on the weekly bars.  The current short-term range low is at 2317.75 and if that pivot can hold up in the coming weeks, we could get the next higher pivot low in the paradigm sequence, which will narrow the excessively-wide intermediate range and move the intermediate stop-reverse line up (to 2317.75 if that line holds–or to whatever level that the current intermediate pullback ultimately reverses).

For those of you who have been following my rants for awhile, you will recall that I continually point out that the current paradigm will remain in effect until we finally get a push below the last higher pivot low on this weekly chart that is not reversed.  Once that eventually happens then we will have transitioned from a secular bull market to a cyclical bear correction.  Right now, the last higher pivot low is way back at 2020.25, so obviously the market needs to regroup but is still a long way from a paradigm reversal.

Remember that I said to keep 2317.75 in mind earlier?  Well, if that line holds up going forward then it meets all the criteria to eventually become the next higher 4-bar pivot low above point number 9 on the chart above.  The key word is ‘if’ and time will tell.  At any rate, if the market is going to bounce and head back toward new high territory, then right here near the bottom of the short-term range seems like a decent place to do so.

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S&P 500 Futures Daily Bar/Range Chart 4-17-2017
m S&P 500 Futures Daily Bar/Range Chart 4-17-2017

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Moving in to the daily bars/trading range chart we can see that the market has been in a shallow correction since the intermediate top at 2398 on March 1st.  Notice how wide the intermediate range is (medium yellow shading on chart above).  If the current short-term range bottom at 2317.75 holds up that could eventually morph into a new higher intermediate stop-reverse line, but we’ll have to wait and see how it goes.

The light gray trendline represents the top of the VST channel.  We will need to first see a breakout above that line to overcome the first bearish hurdle.  Technically, the S&P 500 Futures are currently trending VST bearish under that trendline and are in a short-term trading range between 2317.75 and 2375.

As I have pointed out several times in recent posts–the controlling feature of the market since the Trump election in November has been the centerline of the long-term bullish trident channel (shown as dashed green parallel lines on the chart above).  There had not been a daily bar close under that centerline until April 4th.  Then we had a few back-kisses to that centerline just before the break and current pullback.  As I type, we are getting a bounce back toward the VST trendline resistance and we’ll see how it goes if the market gets there.

The current bar low is at 2322.75.  If I were pulling the levers I might set a short-term bottom right there and preserve the 2317.75 low for the next intermediate stop-reverse line, but that is just me.  Obviously, the path of least resistance is down until some of the overhead bearish resistance begins to fall.

If 2317.75 were to fail, the next targets lower would be the open gap at 2309.75 and then confirmed support at 2296.50.  Worst-case scenario (or best case for bears) would be run toward the bottom rail of the rising long-term channel, which is currently near the 2240 area.

So, let’s keep an eye on a couple of things right here.  The old short-term trendline support broke at 2338 and that is where price is pausing as I type.  Next resistance above is descending VST trendline resistance (currently at 2347).  Underneath we have the short-term range bottom at 2317.75, which will be the most important number going forward.

…my .02

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