Market Update – Options Rollover Day

Today is ‘Options Rollover Day’ and Futures Options have now rolled over from the June 2020 to September 2020 contract with a difference of -10.50 points from ESM20 (June) to ESU20 (September).

All previous chart numbers have been adjusted to reflect the new continuous contract pricing—so, for example, the Long Term stop/reverse line from the expiring June contract at 2,965 now becomes 2,954.50, and so forth.

 

click on image to enlarge

My daily bar/range chart above shows how the Stops and Targets signals correlate…

The three shaded areas represent trading ranges (lighter to brighter –> LT to ST ).

I’ll keep it short and quick today as I emerge from my burrow just to post this and then back into a deep work state I go…

Here’s a cool Stops and Targets shortcut trick that many of you already know, but others might not…

 

At the top of every analysis page is a ‘range envelopes’ section.  That little window says a whole lot if you know how to read it.  So, here’s how I do it…

Start by finding the newest date.  That would be ‘TODAY‘ on the example above.  Let you eyes slide over to the left and then take note of the timeframe and which side of the range envelope is colored.  The red range BOTTOM number at  3,169.25 with a red arrow next to it tells me that we have a short-term downside range breakout.  That means either sell or sell-short depending on how you roll.

After I have that top priority signal in mind I look for the next newest signal, which in the example above happened on 09-Jun-20 where we have a red color on the TOP of the intermediate range and a green arrow to the left.  That tells me that we had an intermediate-term counter-trend pullback alert signal generated at 3,200 on 09-Jun-20 –>and that green arrow tells me the intermediate is trending bullish above 2,997.50.

Finally I do the same thing on the oldest signal and can tell that we had a long-term range TOP breakout and bullish trend change at 3,055.00 back on 02-Jun-20.  I know it is was a major trend change because of the green curved up arrow.

 

So, let’s put that all together while looking at my chart above and here is my analysis…

Today we got a short-term sell signal at 3169.25 that was hinted at previously by a range top pullback alert at 3,200.  The next targets lower will be 3,055.00 (to test the LT range breakout and trend change) and then 2,997.50 (intermediate trend support) and finally 2,749.75 (long-term range envelope bottom).  See how that all works together?  Pretty cool, right?

That same quick scan technique works for any other tracked symbol at S&T and it works equally well for a very fast assessment of big picture analysis in any kind of market.

 

Quick political rant…

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Several years ago I befriended a fascinating and brilliant historian during a visit to Colonial Williamsburg.  He said to me, circumspectly, ‘people never really change’.  The clothes and toys do, of course–but people generally are the same over time.  Back during the American Revolution, for example, he said that the political divide was approximately 40% on one side 40% on the other–and then 20% in the middle (I may not recollect those percentages with absolute precision–but it’s close enough to make the point).  So, in essence, the American Revolution was won by a minority of the population struggling against equally-determined opposition on the other side–but the key was swaying the opinion of the middle 20% to ultimately tilt the balance.  Now, let’s be honest here… the ‘middle 20% people’ aren’t the brightest bulbs out there.  Just sayin’.  Politicians and the news media have been at the same games for as long as anyone can remember.

There is an enormous all-out battle being waged currently because I think  this could be an extinction-level event for the side that loses in November.  In my opinion, one of the two major political parties could very well cease to exist afterwards.  So, it’s a really big deal for the money-grubbing bastards who are in the current political power positions–but for the rest of us, well… we just gotta survive and thrive the best we can while our leaders do increasingly stupid stuff.

Remember, and this is a VERY important point, the political powers on each side right now are assuming that their associated base 40% is firmly locked in.  The entire battle being waged from now until just before the election will be epic pandering from both sides for persuasion and control of the center 20%.

Democrats only lost 8% of the black vote to Trump in 2016, for example.  Recent polls (pre-riot instigation) had black support for Trump at north of 30%.  So, now you understand what is going on there.  Democrats want their escaping slaves BACK on the plantation and if they have have to burn down their neighborhoods and kill a few in the process–well, so be it.  Trump’s side is not taking the bait the left wants, which is media images of uniformed white people oppressing innocent minority protestors.  It is likely infuriating for right-leaning people to see the unpunished lawlessness, but it is probably v-e-r-y good politics to just let it all burn and sit back and point the finger of blame where it belongs and ask why the folks who actually control the war zones politically aren’t doing anything about it.

If you are a 40%-er like me (most of us), then perhaps best just to sit back and ignore the breathless messaging flying back and forth between the opposing political sides.  None of that 20% targeted tripe will placate any of the 80% of us who have already decided how we will vote.  The Capital City scumbags are likely going to take us all for granted (as usual) until just before the election and then maybe we’ll get a bone thrown our way just to inspire us to turn out to vote.

I’ve been head down doing extremely productive things since all this silliness started and for the most part disengaging socially (on my terms, not theirs).  I can’t really control the environment that has been created by the warring powers–but I CAN optimize my exploitation of opportunity to do some positive things I didn’t have time to tackle before.  I haven’t been answering many emails during this intense productivity period–so please don’t take it personally if you sent me something and haven’t heard back.

As for propaganda management–I have an app called Block Site that prevents my browser from links redirecting me to the known propaganda outlets.  If I inadvertently get to a site where dumb stuff is being pushed, I just block it.  Funny thing is, there aren’t many news sites left that aren’t blocked.  The app saves me a ton of time and keeps me from getting worked up about the intense assault on logic, reason, and morality.  My tuning OUT is exactly the OPPOSITE of what the opposition wants… which is to simultaneously agitate and inflame the 20% simpletons–and to demoralize the opposing 40%.

My strategy?  I just laugh at ’em and move on to doing something fun, interesting, and/or productive.  Life’s too short to get sucked into any of that contrived silliness.

That’s my personal take on it, since several of you asked.

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