In the range envelopes section on the S&P 500 Futures screen capture from Stops and Targets note that the three green up arrows ↑ show that the S&P futures are currently trending bullish in all three timeframes. When that happens the range bottom is equal to the stop/reverse line. The short way to say that is… trends are up in all three timeframes so long as price remains above those range bottoms –> 2736.50 / 2651.75 / 2544.25
Also note that the range top numbers are all currently colored bright green… that means that we are in upside breakout mode above those lines –> 2808.25
The very first counter-trend pullback signal would come on a close under that range top. If that were to happen, then the first targets in each timeframe would be the range bottoms. See how that works?
Let’s take a peek at the same data, but in chart form…
The chart above shows the historical range envelopes for all three timeframes –> long-term top and bottom rails are solid lines, intermediate is dashed, and short-term is dotted. You will notice that those range envelopes are identical to the Stops and Targets screen capture.
Now, take a closer look at Stops and Targets in the first screen capture above to see where the last trend start signal was for each timeframe. I have highlighted those on the chart above…
The last short-term trend start buy was at 2680.75 on January 2nd and is outlined with a green oval on the chart above.
The last intermediate trend start buy signal was at 2433.75 on 22-Aug-2017. That is highlighted in yellow on the chart above.
The last long-term trend start signal was on Election Night back in 04-Nov-2016
Notice how the range bottom support has worked out for these signals. This amazing market rally has only had two intermediate touches of support since November of 2016 and price hasn’t touched long-term support since Election night back in 2016.
Sooner or later this market is due for a significant correction. We will know when to start watching for first signs of weakness when we get a dark red counter-trend signal on a cross under the range tops (all are currently at 2808.25)–but we will KNOW when a trend actually changes when we get a cross under a range bottom that does not reverse/bounce.
Pretty cool how that all works, don’t you think?