Market Update

 

Let’s take a peek at where the market currently is using Stops and Target’s S&P 500 Futures summary tab as a proxy…

  1. A Top Spotter signal was generated on September 21st at 2947.  That signal was confirmed on a cross below 2932 on September 24th.
  2. The short-term trend flipped bearish at 2925.50 on October 4th.  The stop/reverse line has followed that trending move down and is currently at 2898.25.
  3. There was a bounce at intermediate range envelope support yesterday at 2866 for both the short and intermediate terms.

 

 

 

click image to enlarge

 

In previous posts I mentioned that the market has been dominated by events in the intermediate timeframe since the current leg up started at the major Bottom Spotter–and that we wouldn’t see any change in that paradigm until the rising lower range envelope channel (shown as dashed green lines on the chart above) is eventually broken and held to the downside.

On the chart above the major event sequence is as follows…

  1. Top Spotter at 2892.25 on 29-Jan-18
  2. Bottom Spotter at 2452.75 on 06-Feb-18
  3. Range top rail resistance touch at 2814 on 13-Mar-18
  4. Range bottom counter trend buy at 2560.75 on 03-Apr-18 (cyan shading on chart above)
  5. Top Spotter at 2801 on 13-Jun-18
  6. Intermediate trend start buy at 2722.75 on 05-Jul-18
  7. Top Spotter at 2947 on 21-Sep-18
  8. Range Support buy at 2866 yesterday

So, here were are now between intermediate range support at 2866 and the short-term stop/reverse line at 2898.25

A breakout above the stop/reverse line at 2898.25 would be a confirmation of the support buy at 2866 and will bring in momentum buyers (and smart bears buying to cover) if that happens.  On the other hand, a break below *2866 would be a significant change in the character of this very powerful bull market, which has not even sniffed a touch of that rising bottom rail since the intermediate range bottom counter-trend buy signal way back on 03-Apr-18.

So ‘head’s up’ …this is an important juncture right here.  Watch the short-term stop/reverse line for clues going forward.

…my .02

 

Futures Options Rollover

 

Futures Options have rolled over from the September 2018 to December 2018 futures contract with a difference of +5 points from ESU18 (September) to ESZ18 (December).

All previous chart numbers have been adjusted to reflect the new contract pricing—so, for example, the Intermediate Stop/Reverse line from the expiring September contract at 2803 now becomes 2808, and so forth.

 

 

click on image to enlarge chart

 

The chart above is an update from my last post.  The rally from the Bottom Spotter at 2542.75 on 6-Feb-18 continues to chug along and will do so until the bottom of the intermediate range envelope channel is eventually breached.  That channel bottom is currently at 2808.

The pros pushed the S&P 500 Futures above the January 29 top at 2892.25, as expected.  Many bears were forced to cover above that line and we got a subsequent counter-trend pullback warning at 2922.50 on 30-Aug-18 for both the IT and LT timeframes after that bearish buy-to-cover stop feeding frenzy.  It is interesting to note that no intermediate counter-trend sell signals have made it back to the bottom of the range channel since the start of this very powerful rally at the last counter-trend buy signal at 2560.75 on 3-Apr-18!

This rally since the last Bottom Spotter has been amazing–but after the pros digested the big trove of bear stops resting above the January highs there is now an increased probability for a deeper correction at some point.

So, basic analysis here is the same as before… continue to diligently watch the intermediate range bottom, which hasn’t been touched since 2-Apr-18.  So long as that channel keeps rising then the bullish trend continues.

If we get a push to new highs with a reversal selloff on the same day–then watch for potential Top Spotter signals.  If we get weakness ahead, then watch the bottom of the short-term range envelope, which is currently at 2870.  A break below would be a counter-trend sell for the intermediate timeframe and could bring forth a shot at hitting that lower rail of the intermediate range envelope on a deeper pullback, which would be a notable change in character for this market.

…my .02

 

 

 

 

 

 

 

Market Update

 

 

click image to enlarge

 

The chart above isolates the Intermediate timeframe from Stops and Targets.  That is the timeframe the pros have been using to drive the market higher since the major pullback bottom in February.

I have highlighted the three major Stops and Targets BUY signals on the chart directly above.  Those were…

  1. Bottom Spotter signal on February 6th (up 13% since!)
  2. Intermediate range bottom counter-trend buy signal (created when a downside range breakout is reversed to the upside) on April 3rd
  3. Last stop/reverse line buy signal on July 5th

Note that the S&P 500 Futures have been trending ( symbol next to intermediate range) since the range bottom counter-trend BUY signal and that no pullback has touched the bottom of the intermediate channel (shown as dashed green lines on the chart above) since.

So, two simple takeaways…

  1. Watch the Intermediate range envelope bottom (currently at 2791).  The current bullish stair step pattern in place since April 3rd will only end when that line is eventually crossed to the downside.
  2. The next target higher is the top of the January 29 to February takedown range (2537.75 to 2887.25).  There are likely tons of bearish buy-to-cover stops resting just above that line.

…my .02

 

 

 

 

 

Market Update


 

 

 

click image to enlarge

 

Head’s up here…

The S&P 500 Futures are testing the bottom of the range envelope.  We see the first signs of bearish range expansion here underneath 2798.25 and that is the line currently in play.  It is possible that we could see a bounce once the short-term stops are cleared under 2793 but in recent times a breach of the short-term range envelope more often than not is a warning of a deeper pullback coming ahead.

As you can see in the daily bar range chart above–there isn’t any support between the current price and 2717.75, so the market is definitely vulnerable here under 2798.25.

The key indicator to watch at Stops and Targets is the short-term range envelope low.  Bears are good to go here until we get a counter-trend buy signal.  Once that happens then all bearish bets are off.

 

click image to enlarge

 

The chart just above shows hourly bars for day traders.  It’s all about 2798.25 today.  Price action is bearish below but reverses to bullish above.  We are about to test that resistance from below and we’ll see how it goes.  There is a big support gap below down to 2748, so the pros will either protect here–or we can expect some downside underneath if 2798.25 becomes new resistance.

…my .02

 

 

Market Update

I’m back.   🙂

Let’s take a peek at the Big Picture market setup to catch up…

 

click on image to enlarge

 

Let’s start with the monthly bar chart above…

The secular bull market that started in 2009 is still going strong.  Price is extended from the VLT (very-long-term) trendline but until we start seeing lower lows begin to build and eventually a breach of that trendline support–the show goes on.

The initial rally from the 2009 lows was fueled by massive intervention (and trillions of new debt) including a very accommodating Fed.  What remains to be seen going forward is if the Trump efforts to build a new economic juggernaut based upon actual wealth-creation can overcome a tightening Fed.  They hate him, he hates them.  Rock/hard place.  Everyone is watching and waiting to see who wins the political struggle between Trump and the global socialists.  Perhaps the upcoming mid-term elections will help to add some clarity on that score–but the market action since the beginning of the year suggests plenty of caution and nervousness as we all wait for the ridiculous FBI/DOJ fiasco (and perhaps an all-out desperate scramble to run out the statute of limitations clock on Hillary and company’s crimes) to be resolved.

So, basically… secular bull with a holding pattern inside the January/February pullback range.

 

 

 

Next, let’s take a peek at the weekly bar chart (above)…

The weekly bar chart reflects a real-time roadmap of the amazing paradigm that has been in place since 2009.  What we watch for here are the formation of four bar pivot lows.  Once those new higher lows are built then we watch for what I call ‘stop sweep/reversals’.  That is when price is driven down by the pros below the last higher pivot low and then immediately reversed once the stops have been run.  It has happened nine times since 2009–and seven of those stop/sweep/reversals were perfect entries to ride the secular bull with little to no stress after entry and massive gains.  When it happens again I will be sure to point it out here in real-time–just as I did the last time it happened, which was when President Trump was elected (see point 9 on the chart above).

As I type, the last higher pivot low was formed at 2555.75 (see dashed blue line on chart above).  That is the current ‘hard deck’ for bullish traders riding the rally since the last stop sweep/reversal entry at point 9.  The trailing stops (at the hard deck) are now locking in approximately 450 points of gains–and the current net gain is up 700 points since the last stop sweep/reversal entry at the last green arrow!   😎

 

 

 

click on image to enlarge

The Stops and Targets screen capture and daily bar range chart (above) lays out the setup in three timeframes.  The shaded areas on the chart show the range envelopes for three timeframes (light yellow is long-term, medium yellow is intermediate, and bright yellow is short-term).  The stop/reverse lines from Stops and Targets are also shown on the chart along with the range envelopes.  Note that the Stops and Targets analysis tab correlates directly with all of my charts.

If you look at the Stops and Targets screen capture you will notice that all three range top numbers are dark red.  That indicates triple range top resistance at 2818.25 and that is the key number in play right now.  The last time we hit triple resistance was on June 13 and the market pulled back to the bottom of the intermediate range envelope after the touch.  If we were to get a break under the bottom of the short-term range envelope, the intermediate range channel bottom would again be the lower target.  On the other hand, if you look above 2818.25 you will notice that there is no resistance above until 2887.25, which was the all-time high set in January.

So, two number to watch going forward… short-term range envelope support (currently at 2789.75) and triple resistance at 2818.25.  A breakout on either side could lead to a quick move as momentum traders from either side pile in looking for either 2717.25 below or 2887.25 above.

…my .02