The screen capture above shows the summary tab for the S&P 500 Futures as I type.
Nothing has really changed yet. This remains a fully-bearish market (BEAR 10 rating at Stops and Targets) and all trends remain down below the Short-term Stop/Reverse Line, which is currently located at 2460.
Since this market is trending bearish, that line is equal to the last lower high on the daily bars, which was set on 19-March.
Yes, Friday’s daily bar high did briefly poke above that line–but it also poked just below to create an outside bar, which is the bane of trend followers–but a delight for range traders. That stunt was no surprise on OpEx as the pros pulled out all of the stops to maximize their gains while minimizing everyone else. It’s what they do, and they are damn good at it.
For a solid overview of the Big Picture let’s take a look at the major timeframes on my charts, starting from monthly bars (long-term), then zooming in to weekly bars (intermediate), and finally to daily bars (short-term)….
click image to enlarge
The chart above shows monthly bars. Each candlestick bar represents one month of trading in the S&P 500 Futures using continuous contract pricing adjusted to the current (June 2020 expiration) contract.
The clear takeaway is that the pros aimed for and then achieved raiding the huge trove of stops under 2319.50. That move sticks out like a sore thumb and is obvious to me. THAT was the target for the operation to maximize the Quadruple Expiration Heist, which is now in the rearview mirror.
One thing we can assume, without any hesitation, is that the pros are/were all-in on the short side meaning long puts, short calls, short stock and all the while selling with both fists to drive this market down…intentionally!
The put and call options profits for the pros are now all in the books as of Friday’s close–and it was e-n-o-r-m-o-u-s-l-y profitable for the insiders (Senator Kelly Loeffler is married to the Chairman and CEO of the NYSE, for what that is worth anecdotally).
Now, what remains is to settle the equities that have been ‘put’ to the put sellers. Most put sellers who were exposed to huge losses limited their exposure by buying offsetting puts to close their positions, but many would have stock assigned to them at prices perhaps well above the current market. What do you think those folks are going to do next? Will they sell the underlying stock at huge losses? You bet they will if we get another engineered plunge down (and many will also sell if/when they get back to ‘break even’).
So, let’s take a worst case scenario for bulls, which is also a best case scenario for bears–and look at the next target lower…
Do you see the two solid green lines at the 2091 area? Those are confirmed support lines that were created when the resistance from a previous bearish trend was overcome to the upside. That old resistance became new support when the trend flipped way back in 2016. In other words, that is where the market began to respond with exuberance after the Trump Election Victory in 2016.
Now, take a peek at the dashed gray line just under those two lines at 2039.50. THAT was the election night low in the futures where the pros flipped from short to long (because Hillary lost) before driving this thing WAY up.
It would seem that the global socialists might now be sending a not-so-subtle message to President Trump and his supporters… That message is ‘we can take it all back’, and they almost have in a very short time. If President Trump doesn’t do what they want, then the next plunge could be to take out the last tiny stock market remains of the great Trump economy (which came entirely at the globalist’s expense–and they did NOT like that!).
So, bottom line is that the OpEx target and their brutal mobster enforcer message was most definitely achieved.
Remember when I wrote that the pros almost always select stop areas under untested support in bearish raids–and untested resistance above resistance in bullish raids as targets of an engineered move? Well, the next level of untested support is under 2039.50
If I were a global socialist, and thank God that I am not, that is exactly where I would go if my intent was to completely undermine the underpinnings of Donald Trump’s most glorious accomplishment… which was the amazing US nationalist economic boom as a result of his America First policies, which were clearly working spectacularly before this organized attack was launched.
Imagine the Fake News headlines if they were to go BELOW that mark; ‘ALL Gains Since Donald Trump Assumed Office Are Now Gone!‘
The other side of possibilities here is that the pros get what they wanted at Friday’s OpEx AND The Parliament of Whores in the US Congress passes their Porkulus Bill 2.0, which will add TRILLIONS to the debt (which, of course, the pros hold).
Okay President Trump… the cards have been dealt and so now let’s see what you have got! These globalists are clearly very formidable foes. Will you choose to fight Mr. President–or to fold? I hold a small glimmer of hope that you are going to pull an amazing rabbit out of the hat at the end of all this, but it is just that… a very small (but still hopeful) glimmer.
On the weekly bar chart above, we can move in closer to examine the intermediate timeframe and to also check in on our Weekly Bar Paradigm…which is now being tested for only the 11th time since 2009.
We see the same setup I mentioned above with the raid of stops under the last higher 4-bar weekly pivot low (starting at 2846.50 and now below point number 10 on the chart above). We also see a bounce off of weekly confirmed support at 2196.
Now, let me provide the best case scenario for bulls who would be hoping to ride the 11th installment of the Weekly Bar Bullish paradigm buy–should that event transpire. The pros got their OpEx loot under 2319.50 on Friday. Let’s assume they get what the want next with a new Porkulus 2.0 robbery in the US Congress… There is nothing more revered to pattern traders than a double bottom chart pattern. If the pros decide to set a double bottom, aggressive counter-trend traders could use 2196 as signal and 2319.50 as a buy entry when crossed. They teased that a bit this morning–but alas, the Congress Critters misbehaved.
Moving in now to the daily bar chart (see above) we can see the same 2196 confirmed support and then a concentrated band of confirmed resistance (where support was broken on the OpEx stop raid) between 2243.25 and 2342. The futures poked through that band briefly this morning, but it was only an early head fake, so far.
Now, and this is a big point that I have been pounding the table about over and over again here… The short-term trend cannot possibly turn up until we get a breakout above the short-term stop reverse line currently at 2460. The intermediate trend cannot possibly turn up until after the short-term trend gets flipped, and so forth. Do you follow my point?
Yes, somebody is going to ultimately catch a golden knife at the turn with all the ensuing glory and full bragging rights–but look at all the dead bodies of hopeful knife catchers now littering the field from 3386.25 all the way down to the current low at 2174!
There are currently a LOT of underwater speculators out there who can’t wait to sell once they ‘break even’ on those failed knife catches. Those are the sellers that will have to be overcome before a sustained rally can get going. Only two ways to do that is to either slowly chew through them–or by the pros pouring buy orders into the the futures on the long side to skip above those exit stops and turn ready sellers into hopeful holders (with profits).
That all depends on if the pros they what get what they want from the detestable, pusillanimous, bottom-feeding (too much?) politicians they own (in my opinion). Makes one wonder if all the suspicious lockdown orders issued by politicians are actually intended to keep the pitchfork-wielding mobs from storming Washington DC while they accomplish their assigned task.
Whatever happens in the broad markets going forward will originate in the Futures. My advice is to watch them closely for clues. Easiest way to do that under the current conditions is to continue watching the Short-term Stop/Reverse line at Stops and Targets.
To my bearish friends, don’t let the pros drag your trades to the other side of that line! To my bullish friends–I know it is tough, but it is best to be patient when selecting new entries and to wait for the bearish pattern to change and confirm. A lot of damage has been done to the markets and the way damage of this sort is typically ultimately repaired comes through long periods of annoying sideways consolidation. That consolidation is caused by an abundance of willing sellers at resistance levels above. Those resistance levels are where the previous knife catchers are waiting to exit–and the bears, who have been awakened after a long hibernation, are eager to sell short. There are just too many potential sellers above until/unless we start to jump over resistance lines, which is what ignites bear market rallies.
If I were writing the Tom Clancy-esque script for the President it might go something like this… First let them pass the huge Purkulus Bill 2.0 and then immediately announce that China will be paying for ALL of it. Seize their US assets, cancel all outstanding debt owed to them and then impose punitive tarriffs on ALL Chinese imports until the debts are fully paid (with interest). And then for the coup de grace, I would seize the Federal Reserve and wipe out the ALL the debt on their books (since the right hand just owes the left there anyway) and tell the globalist bankers to pound sand! Yes! …and there would be non-stop televised perp walks on the newly nationalized TV Networks (formerly Fake News/globalist assets)!
Yep, that’s what I would do!
But it remains to be seen what President Trump actually does about this audacious assault on America, if anything. There are very powerful forces in play here. Strong opening moves by the black team! Now, let’s see what the white side has in store for either a response, or a surrender.
The Short-term Stop/Reverse Line is currently at ES 2460!