Market Update

click image to enlarge

 

The snap-back bounce from the bottom of the blue parallel channel (see yellow highlight on chart above) has now reached the center of a new trident (see lighter blue lines on chart above) channel.   The new trident channel ‘handle’ is drawn from the low of the last pullback in February (2542.75) and incorporates the high and low of the now-defined decline from 2947 to 2603 for the ‘forks’.

Both of these channels are bullish, but if we get a typical exhaustion point followed by another leg down then I will be able to draw in a new short-term bearish channel that will incorporate 2947 (handle) and 2603 (fork #1) along with an as-yet undefined right shoulder (which would become fork #2).

Watching now to see where the current push eventually stalls…

 

 

click image to enlarge

 

Looking at the daily bar/range chart above, it looks to me like the next target higher could be the open gap at 2816.25.  The S&P 500 Futures more often than not will fill these type of open gaps because there are stops just above ripe for the harvesting.  If that gap fill doesn’t stop ’em, the next target higher is the intermediate sell resistance at 2870.

The short-term trailing stop continues to move up with each new daily bar higher low.  The most recent occurrence was yesterday’s low at 2729.75 and after today’s close that short-term stop/reverse line will move to today’s low of 2744.75.  A move under that short-term stop/reverse line at any point in the future would be the first confirmation of a turn back in the other direction.  See how that works?

 

Yesterday was the US Mid-term Elections and the results were pretty disappointing for both sides.  There was no ‘Blue Wave’ or ‘Red Wave’.  Billions of dollars and a lot of emotional ammunition was spent to end up ultimately with exactly what the lobbyists and political profiteers crave, which is more future opportunities to enrich themselves via ‘gridlock’ from a divided Congress.  Same as it ever was.

I can imagine sitting in a restaurant between two tables of partisan political loyalists…one table Democrat and the other Republican, and hearing each of them say simultaneously to their respective table ‘I can’t believe there are so many STUPID people in America’.  Somehow, in my twisted mind, I find that mildly amusing.

The pros front-ran this whole election with the engineered takedown from 2947 to 2603.  Now, we all get to muddle through the inevitable trading range that will continue until one side or the other of that big range gets taken out sometime in the future.

Next planned event of importance happens on Thursday when the FOMC issues their interest proclamation at 2 PM (NY time), followed by a release of the Fed Balance Sheet at 4:30 PM.  As I have pointed out before, the Fed is the best weapon the global socialists have to try to check Trump’s unleashing of the US economic powerhouse and a fundamental reshaping of the global ‘good old boy’ network.

Let’s see what happens at the gap fill at 2816.25 if/when it comes.  Also, remember to keep an eye on the ST stop/reverse line.

…my .02