S&P 500 Futures Options Update – Inauguration Day!

The big day is finally here for the official start of the Trump Presidency.  Starting at about noon today the adults will be back in charge and the entire playing board will begin to be reset.  There has not been such a significant change in direction for policy since 1980 when Ronald Reagan supplanted the woefully inept, but likable and I think a decent man, Jimmy Carter.  In the coming weeks, as various agency staffs are radically reshuffled and new policies begin to take effect the market led by the E-mini S&P 500 futures options will begin to operate and respond under new management.

There are not many people left trading in the markets who will not openly admit that the game has been rigged these past eight years.  The weekly paradigm that we have been pointing out here since the 2009 ARRA bottom has been easy pickings for those who have been willing to suspend economic reality and ride the annual stimulus gravy train that was made possible by a complete lack of a Federal budget and continuing spending resolutions.  It is safe to say that game will be coming to a screeching halt as the extremely impressive Trump Cabinet gets to work, who unlike the outgoing community organizer and his band of misfits knows a thing or two about budgets and managing money.

What will it mean for the markets going forward once the recurring stimulus opiate is removed?  That remains to be seen.  The old order won’t relinquish trillions of dollars of power without a fight–but the globalist cabal who recently met in Davos has never looked more impotent than they do now.  However, those folks own and control enormous monopolies almost everywhere.  For example… have you ever noticed that no matter what city you travel to in America you have the same limited number of choices?  Usually, they give you two stores in each segment…examples are Home Depot or Lowes for hardware.  Drug Stores?  Yep, usually just two per market.  Restaurants?  Same couple of restaurant groups owns all of those fast food franchises that are the exact same in every town.  That’s the commercial face of global socialism.  Fewer and fewer choices for the peon masses with resulting lower quality and higher prices.  It is the Hegelian Dialectic concept of thesis (Capitalism), antithesis (communism), and their glorious end-game goal of synthesis (the illusion of Capitalism under the iron-fisted control of a very few ultra-rich who own everything, while the indentured masses exist solely for servicing their pleasure).  Well, folks I don’t know about you…but I absolutely loathe those people and want to see America returned to a land of opportunity where if someone wants to start a new hardware store or  drug store, or a new restaurant, or a small farm, or a factory making an innovative new product, or whatever entrepreneurial passion that drives and inspires them–that the government-imposed and enforced barriers to entry are absolutely minimal!  The globalists have been amassing their power through unfettered mergers and acquisitions and then buying off politicians to effect onerous laws and regulations that make it darn near impossible for anybody to break into a market as an entrepreneur and challenge their benefactor’s monopolies.

Well, guess what? The Trump administration totally gets that and the very smart folks who are about to assume control will be immediately set at odds against those despicable globalist creatures.  If the Trump administration is successful at sidestepping a rotten-to-the-core Congress and a filthy dirty press corps then great things will begin to happen in America again and we are all going to be better off in a few years.  The brilliance of Trump is that he makes obsolete the Alinsky tactic of identity politics, whereby the globalists seek to create division and hatred between every possible identity group.  Trump has redefined the battle as nationalists versus globalists.  ALL Americans can unite under Trump against our true enemy, which are the oppressive midgets behind the curtain.  Today is a good day to go out and buy a new American flag!

So, after a slight rant diversion, I come back to the real question of what does this mean for the markets?  I think ultimately a successful Trump presidency can be great for all Americans–but it might not be a smooth ride for the markets as the old corrupt ways are flushed out and the markets begin to return to free trading and are weaned from constant jolts in the overnight futures at critical junctures.  Major changes are coming and I do mean MAJOR.  As I mentioned in a previous post, sometimes it requires some short-term pain to realize long-term prosperity and that could be forthcoming.  No worries, though, we will know when the paradigm has changed when the weekly chart breaks form and stops building higher lows off of stop sweep/reversals.  The hard deck currently for those who are in major profit in the long term is at ES 2023.23  We are a long way above that hard deck at present but after all the sideways trading recently it won’t take much to achieve the minimum pullback required to set the next higher pivot low on the weekly chart.  That minimum pullback target is currently at 2227.75, FYI.

So, with all that said let’s take a look at the current setup across each timeframe starting from the monthly bars and zooming in to hourly….

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E-Mini S&P 500 futures monthly bars
E-Mini S&P 500 futures monthly bars

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The five wave extension target is 2520.25.  We have a higher high and higher low on the current monthly bar and it’s all good on a monthly perspective above December’s close of 2236.25

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E-Mini S&P 500 Futures weekly bars
E-Mini S&P 500 Futures weekly bars

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Today we come to the end of an error as far as regime change, but the markets sure have been beautifully and skillfully managed (rigged) over the past eight years.  Almost straight up while nearly 100 million able-bodied Americans have been out of the workforce and the national debt has ballooned to 20 trillion dollars.

The weekly chart above has been our roadmap for the overt manipulation by the outgoing caliphate.  We will know when the paradigm has changed when a dip below that last higher pivot low is not immediately bought on a stop sweep/reversal as it has in 7 out of 9 occurrences over the past 8 years.  Once we see a failure to recover back above that last pivot low we will know that the game has changed.  As I pointed out earlier, the current hard deck for the paradigm is at the last 4-week pivot low at 2023.25.  The minimal pullback from here to accomplish a new higher pivot low is currently 2227.75.  If we get selling at some point, that minimum pullback number will be the first downside target.

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E-Mini S&P 500 Futures daily bar/range chart
E-Mini S&P 500 Futures daily bar/range chart

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The daily bar/range chart above shows the short-term trading range of 2028 to 2277 with the bottom of the very-short-term range at 2248.50.  Barring something extraordinary today, the short-term primary trend line will move up to 2248.50 at the close and then will become an important line in the coming days.  Note also that there is an open gap at 2236.25 from the New Year.  That would be the first downside target if selling comes, followed by the previously mentioned 2275.25 (just under the current ST range bottom).  An upside breakout above 2277 would have no resistance above and would instead run to exhaustion, which is where we would want to keep a keen eye on the spotter signals, should that happen.  Note also that price has been on autopilot recently while riding the center tine of the intermediate trident channel.  A break below that center channel support would also be noteworthy to traders.

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E-Mini S&P 500 Futures hourly bars
E-Mini S&P 500 Futures hourly bars

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And finally, we come to the hourly bars.  The monotonous sideways action of late has swept away all close-in support and resistance but the key features to note here for very short-term traders are the hidden gaps at 2274.50 and 2233.50.  That should define the immediate trading range unless we get a breakout to the upside, but just be aware that the pros don’t like to leave unfilled gaps on the chart.

In the near term, ES 2248.50 will be the line to watch.  A break under there would bring sellers as the open gap and minimal pullback targets would come into play with no significant support in between.

Hope everyone has a great day as we celebrate the inauguration of our new President!

…my .02

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