Options Rollover Day


Futures Options have now rolled over from the December 2019 to March 2020 contract with a difference of +2.75 points from ESZ19 (December) to ESH20 (March).

All previous chart numbers have been adjusted to reflect the new contract pricing—so, for example, the Long Term stop/reverse line from the expiring December contract at 3033.00 now becomes 3035.75, and so forth.




My updated daily bar/range chart above shows the current broad market configuration–for comparison to the Stops and Targets analysis for S&P 500 Futures screen capture at the beginning of this post.

We got a big spike in the markets this morning on an as-yet unverified (as I type) rumor from the Wall Street Journal that President Trump has a deal in hand with the Chinese. (I am personally very skeptical on that rumor, but we’ll see)

It’s currently all good for bulls above the stop/reverse lines… but be be very careful here (in my opinion).  Market might be potentially volatile ahead due to a number of upcoming big news events that will hit between now and the end-of-year quadruple witching expiration, which is coming on December 20th (also the day the US Federal Government funding expires).

…my .02





Market Update

In my last post, I wrote…

For things to start flipping south we would first see a negative quote price, followed by a counter-trend sell alert on the range envelopes, and then a move underneath the stop/reverse lines–starting with short-term, then intermediate, and finally long-term.  With a break underneath the short-term, the next major target lower becomes the next lower stop/reverse line, etc.  See how all that works?

Today the pros decided to flip the switch and yank the rug, so head’s up…




On the daily bar/range chart above you can see that we have a potential Top Spotter alert, an outside bar, and a stop sweep under the intermediate stop/reverse line.

That’s the way these guys roll, can’t say we didn’t see this coming–>especially since they like to go for the shock and awe approach around holidays when many folks are distracted.

Key lines to watch as this attack unfolds are as follows…

  1. The Top Spotter alert is at the bar high (ES 3158)
  2. The short-term sell was at 3139.50
  3. The initial target for the takedown is the stops resting underneath the intermediate stop/reverse line at 3116.50
  4. Also, note the current bounce off the short-term support trendline (light gray line on the chart above)

So, the first key line to watch is the intermediate stop/reverse line at 3116.50.  Once the pros are done digesting stops underneath, that would be the place where bears would initially start to cover on a move back above and aggressive bulls would buy the dip for a possible snapback rally.

If we don’t see a sustained bounce from the initial takedown to harvest the intermediate stops and the day closes under 3116.50–then the game is to start watching for lower daily bar highs to form on subsequent days–>if the pros decide to head down to the long-term stops currently located under the November monthly bar low at 3033.

If we do get a sequence of lower highs forming on daily bars, then something of substance could be afoot for the bears.  If that sequence does build, then we start to watch for an eventual cross back above the last daily bar lower high.  That is where major profit-taking from savvy bears aligns with a signal for a bounce with the most recent lowest low (range bottom) serving as the hard deck for counter-trend bulls.

As a trader, I am happy to finally see some action.  This market has been b-o-r-i-n-g in recent months.  🙂

Let’s see what the pros have in store for this engineered takedown.

…my .02