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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