Market Update

 

Following up from my last ‘head’s up’ post (bounce alert at the parallel channel bottom at ES 2775.75)…

We are now into the fourth poke above the key resistance level I pointed out last time at 2914.50.  The market has been stalled here as the pros have likely been diffusing the options premium exposure they had going into last Friday’s monthly expiration (August contracts).  That event is in the rearview mirror now, so it’s time again to start preparing for what is ahead.

 

Let’s take a peek at what Stops and Targets has to say and compare my daily bar/range chart above to what we see over there…

 

(FYI:  My daily bar/range chart at the top of this post shows the same three timeframes (LT, IT, ST) along with the associated ranges and stop/reverse lines.)

 

The way I ingest the information from Stops and Targets is to look first at the Stop/Reverse Lines chart, (which is always selected by default, alongside the summary tab, when any new symbol is entered)…

 

A quick glance at the chart for the S&P 500 Futures (symbol ES) shows me LT and IT are currently down, and ST up–by just noting the color of the stop/reverse lines.

Those same stop/reverse lines take the mystery out of momentum regardless of whether the timeframe is trending or rangebound.

The three range envelopes are shown on the Stops and Targets chart as dashed gold lines.  I can quickly see that the current price is trading below the bottom of the LT range (2955.50), rangebound inside the IT, and is trending ST bullish above the range bottom.  A move below that line would flip the ST trend to bearish.

So ‘head’s up’ right here at 2904.25

 

Now that I have the ‘Big Picture’ framework established from a glance at the chart, next up for me is to glean the finer details by looking at the summary tab details…

 

 

I start by reading the Summary overview tab (which is always selected by default)…

 E-Mini S&P 500 Futures Option is rated BULL 1, the first stage of a new uptrend progression in an extended long-term bear market. Although the short-term trend has turned up and is mildly bullish above 2,904.25, the long-term and intermediate trends remain bearish. The line that must be exceeded to move to the next level of bullishness is intermediate trend resistance at 2,940.75. In a continuing long-term bear market, sellers will typically step in at or near that number–but in a strong rally that resistance will eventually break as new buyers expecting higher prices emerge.

 

I next take a glance at the range envelopes chart at the top of the page…

The screen capture above tells the current market tale well…

Starting with the arrows to the left of each range envelope we can see from the that there was a bearish trend change at 2955.50 which happened on 01-Aug-19.  The intermediate symbol indicates ‘rangebound with a bearish bias’ (below the IT stop/reverse line).  The symbol indicates that the short-term timeframe is trending bullish above the 2904.25 range bottom.

 

This market has stalled and is likely coiling for a breakout ahead and the weekly range will determine which way we go from here…

 

 

Once the market is closed today, the weekly range will be determined by the high and low of this past week.  If the current range holds, those intermediate range confines will be 2892.50 to 2939.75

The current weekly bar is an ‘inside bar’, which means both the high and low are constrained inside of the prior week’s range.

An eventual pop above intermediate resistance could lead to a run for new highs, but until/unless we get a breakout above that line the intermediate trend will begin to trend bearish with a succession of lower highs.

 

Weekly Paradigm Update…

We will need two more weeks before the next higher low is officially set on the amazing weekly paradigm that I have been pointing out regularly here since the 2009 lows.  If we can stay above the provisional line at 2775.75 that will become the new hard deck in two weeks.  Until then, the current Weekly Paradigm hard deck remains at 2372.75

 

This market appears to be coiling while waiting for something big to happen…

 

Could this be a clue?

Have a great weekend everyone!

…my .02

 

 

 

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Market Update

 

S&P 500 Futures are currently bouncing off the parallel channel bottom (see dashed blue lines on daily bar/range chart above).

As pointed out in yesterday’s post, the first key upside line to cross was yesterday’s low at 2820.50, which is the short-term range envelope bottom.  That line is located at the bottom of the short-term range, which is highlighted in bright yellow on my chart above…

 

A cross above the short-term range envelope bottom at 2820.50 has generated a range bottom counter-trend buy signal where the most aggressive bears started to take at least partial profits (see screen capture from Stops and Targets above).

Next upside counter-trend price target, if this bounce can stick, is confirmed resistance at 2914.50.

Head’s Up!  ES 2820.50 is the line in play today for the S&P 500 Futures.  Intraday price action is bullish above –> but reverts back to bearish below.

…my .02

 

 

 

 

 

 

 

 

 

Market Update

The Dow Jones Industrials opened the new week down -500 points on a futures-driven beat-down (S&P Futures opened down -50 points).  This move piggybacks the setup going into last week’s FOMC rate announcement.  This (in my opinion) is the pros doing their thing, post-FOMC, and so the game here is to figure out what they are targeting to the downside on this forced move lower.

The headlines blame this overnight beat-down on a counter-move by the communist Chinese to allow the Yuan to depreciate above 7 on the exchange ratio to the Dollar for the first time in a decade.  This is China’s retaliatory move to counteract President Trump’s devastating (to them) import tariff strategy (which is Great for US).  Key US exporters are leading today’s decline, of course, but if you are in the market to buy some cheap Chinese import junk, then the good news is your prices just dropped a bit.  Ultimately, however, the Chinese will lose this battle as America holds all the economic ‘Trump’ cards.  The Chinese continue to absorb the costs and effects of the transition, while the US continues to strengthens its economic base with increased domestic manufacturing.  It’s a brilliant strategy and is being executed flawlessly.

It was inevitable that the collapsing Bush(2)-Clinton-Obama era strategy to weaken America, which is now coming unwound with a Make America Great Again economic squeeze, would eventually create some panic in their circle of accomplices/associates (and bribe suppliers).  The global socialist strategy of impeaching/removing the outsider/disruptor (Trump) appears to have failed miserably, and so now we are seeing screeches and wild flagellations as the old ‘new word order’ (thanks Bush I) continues to come unwound.  Good riddance, I say, but choking off this abomination won’t come easy and these people will stop at nothing in their attempts to maintain a rapidly-slipping grasp on their horrific vision of global socialism/communism–> where a tiny cabal of global overlords prospers (them) while everyone else (us) suffers.

 

So, let’s take another look at where we are, technically, after losing bullish support in all three timeframes…

 

 

Stops and Targets shows a Bear 4 rating for the S&P 500 Futures and 2,955.50 is long-term resistance.

Next S&T major target lower is 2,732.75, which is nearly 5% lower as I write.

So, here is how the pros likely will trade this decline (in my opinion)…

The key numbers going forward will be the previous day’s low and high.  In a decline, the first counter-trend buy will come on a cross back above the previous daily bar low.  That might be unlikely to happen today (2,913.50 was Friday’s low), but if not today, then it will eventually happen on a subsequent day.  A cross back above the previous day’s low (in a downtrend) is where the most aggressive bears will start to cover at least partial profits.

If/when we get a day where a rally crosses back above the previous day’s high, then the most aggressive bears will be getting completely out of short positions and the momentum bulls will jump in on the trend change to double up buying volume.

So, remember to watch the current short-term range envelope numbers for those eventual crossovers for a clue when the reversal starts.  Reread the first sentence of this paragraph and remember that–it’s very important from this configuration!

This ‘feels’ like a forced/planned correction to me since there were no unanimous spotter signals triggered at the top, but it’s fully-bearish here until it ain’t and the previous day’s low is the first line that must be crossed to potentially start to flip the momentum.

Remember also that our Weekly Bar Paradigm ‘hard deck’ is currently sitting at 2,732.75, so that’s the edge of the wiggle room for a significant correction before this pullback/decline potentially turns into something much more ominous.

The previous bullish trend change numbers after the last major pullback were at: 2,845.25 (intermediate), 2,767.75 (short-term), and 2,722.50 (long-term).  Those are the full trend reversal/breakout retest targets lower.

A big fist bump here to all my bearish friends who caught this downdraft entry from the setup in my last post at 3,001.50!  Keep an eye on the short-term (daily bar) range envelope as explained above.

…my .02