S&P 500 Futures

S&P 500 Daily Bars
S&P 500 Daily Bars

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The S&P 500 Futures Daily Bar/Range chart is shown above.  So long as ES closes above 2485 today those will be the new trend support levels for IT (2414), ST (2485), and VST (2485).

As I pointed out previously, ES 2414 has been the key number over the past two weeks and it is now the hard deck for the weekly bar paradigm and will soon become the minimum pullback target for the long-term timeframe.

Next I will be watching for a day where the close is less than the previous day’s high.  In today’s case that would be a close under 2517.75.  If/when that happens the formula for aggressive professional daytraders will be to sell subsequent breaks of the previous day’s low with a trailing stop at the previous day’s high.  That is a counter-trend trading strategy used to play the pullback inside the range envelope.

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S&P 500 Futures Monthly Bars
S&P 500 Futures Monthly Bars

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We have now reached the five wave extension target from the 2009 low that I have been displaying here for years (2513.25 adjusted to the December contract pricing)!  That’s not meant to be a pinpoint target–but rather a ballpark figure and we have achieved the price component but are early on the time axis (see chart above).  But nonetheless, we are now here for at least minimum price projection.  That target number probably seemed laughably unattainable to some folks back when I first started talking about it–but here we are!

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S&P 500 Futures Weekly Bars
S&P 500 Futures Weekly Bars

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Eventually, the pros are going to head back down for another stop sweep/reversal play–possibly under the new paradigm hard deck at 2414 that I pointed out in my previous points at the recent spotter bottom turn (2515.75 September contract pricing).  It’s what they do… and when it happens, it will be the tenth time in the sequence since the 2009 bottom and has marked perfect buy points in almost every occurrence (see weekly chart above for previous occurrences–only exceptions were wave 2 and 4 pullbacks to double bottoms).

The pros will want a running start at a long-term pullback it when it eventually comes…

So head’s up as we move forward after the tag of the VLT extension target at 2513.25.  There are lots of BIG gains to be protected now–so it is a good idea to start thinking about your profit-taking strategies to keep from giving too much of that back when the inevitable pullback comes.  Most retail investors will sit frozen in shock when the selling starts and typically those guys won’t sell until near the bottom of the move (please see points 1-9 on the chart above).  The pros are good at what they do…very good.

First order of business for us is to watch for the very first possible tiny sign of weakness, which in this case will be a daily close that is under the previous day’s high.  Once that happens, we’ll take it from there and try to stay on top of any developing major pullback early in the cycle.  We could also see massive numbers of spotter signals develop once a top comes.  So, that is the focus going forward as we all get to enjoy those fabulous green numbers in the portfolio–but, as always, caveat emptor. 

…my .02

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