Hey Traders,

Bids were completely absent today as market dropped back to key resistance / neckline of head and shoulders pattern that everyone on the planet is watching closely.

While bears put together an impressive down day, bulls managed to hold 200dma and the neckline, those two levels will continue to be key.

Today’s last hour volume was highest in a month (since 6/8) for proper confirmation of the pattern, would need some high volume follow through and successful backtest of the neckline. Several hourly closes and a daily close below the neckline being very important in taking another bearish step.

For bulls to get something going they will need to tackle the following levels:

• 882 - this weeks 3 time support level on hourly charts
• 886.75  retracement zone from this weeks high which will be laminated with 50 ema hourly.
• 898 big recent resistance level with 200ema hourly and 901.7 - 50% line from last week’s high right above.

Will use those levels to guage further directoin of the market.

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Market Internals & Technicals

TICK & STOCHASTICS

Today $TICK put in new 11 day low, here is a chart of what happened when $TICK puts in a low below -1200 and also sum of $TICK high and $TICK low of the day is at -175 or lower:

Firstly, note that 5 day stochastics are at oversold level seen only 3 times during this rally, based on stochastics alone bounce here is rather likely.
Secondly, vertical lines highlight days with sub -1200 tick readings and sub -175 tick hi/lo sum days usually followed by bounce

PUT / CALL RATIO

Our recent good friend Put/ Call ratio has closed above 0.95 line once again, this time closing at 1.0279 reading:

This is 8th time during this rally we got this reading during the rally off of March lows (vertical lines), most have resulted in market moving up, for multiple days on 5 of 8 occasions.

This is also only 3rd time that put/call ratio reading above 0.95 and 5 day stochastics in oversold territory (under 20), two previous instances resulted in 2 and 4 day market advances.

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If you are short: no reason to cover right now, hiding behind one of the “key levels for bulls to get above” from the update and letting the trade continue work would be wise.
If you are flat (myself): you are way too late to the short party at the moment, wait at least for some retracement before considering entering shorts, if it goes down from here, oh well, odds werent in your favor. Taking higher probability long setups considering market internals clues is what I will be doing.

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Markets are in key juncture at the moment, will be keeping a close eye on the price action and will have updates via Twitter and blog as key technical developments take place. Will be particularly focused on US market open and first hour. Will keep you posted

Cheers

Vlad

Hey Traders,

euro retraced to 50% line from last weeks high , monthly pivot, backtest of previous trendline overnight and sold off along with everything else on the planet:

That same retracement zone is expected to act as resistance especially considering it is laminated with major monthly pivot.

Euro is also right above 3 time support level at ~1.3875, on break below would expect test of 50ema on the daily chart (red line):

Below 50ema key S/r band at 1.375. With bottom of big uptrend channel bellow.

Will keep you posted via twitter and blog updates as new action develops.

Cheers

Vlad

Hey Traders,

gold continues to consolidate in a wedge on the daily charts:

With highlighted areas being key support and resistance levels on the break out.

On the hourly chart looks like a possible channel is forming with midline laminated with 200ema hourly acting as excellent s/r level:

Will be watching these channels and trendlines closely for direction clues, and will update as new technical developments take place

Cheers

Vlad

Congrats to all who were short.

Few market notes:

• Retrace to VWAP and Trading hours 50% line was THE trade of the day back at 888.
• ES held above may lows and closed right in 200dma area
• Good old friends put call ratio closed at 1.0279, going for 9th straight gain tomorrow, more on that strat later in daily post.
• Today was highest volume last hour in a month , which is certainly what would be needed to confirm breakdown shall we get more follow through tomorrow.
  • Gap Down on high volume at the open would be huge win for the bears
• Registered 11 day low $TICK today at -1295 (TS feed)
• We are still in the range.. until… well… we are not!
• Bulls will have to get this back above two time support 882 to try to get something going overnight/tomorrow

Be back with full summaries tonight

Cheers

Vlad

Two milestones for ESEC today, in rather short existence :

• 400+ posts on the blog
  
• 1000+ Twitter updates
  

To make sure I keep my main focus on trading, I only post intraday analysis, levels and developments on twitter as that is the easiest and quickest way to do so with minimal distractions from trading. If you are not yet, feel free to follow me @esecfutures. I also post notifications of new daily analysis posts and itnranight analysis levels though that account

As always, if you find any of the information or resources on this site useful, spreading the word about esecfutures.com would be much appreciated

Cheers

Vlad

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update 9:59pm EST:
Looks like another milestone hit few hours later, 400 twitter followers, thx all!

Hey Traders,

no particularly amazing internals clues for today. ES has got a bounce from very oversold levels and the bottom of the range. 905-908 resistance band, retracement zone looks to be key resistance level on the upside, with break above likely meaning trip back to retracement zone from rally highs:

On the downside will be watching shoulderline of potential inverted head and shoulders which also happen to be right above 50% retracement line from the lows.

With major support on the downside at yesterday’s lows and May range lows, with 200dma also in that area expected to provide some support, also check out fib fan which has been respected during this rally

As always will keep posting itnraday internals and level updates on Twitter @esecfutures, so feel free to follow, will also post more significant developments here

Cheers

Vlad

Hey Traders,

Euro continues to trade in the range as all other makets followed on this blog. With key support level coming in at 50ema and big s/r band on the daily, with resistance at two prevoius highs

Will also be keeping an ee on smaller s/r band on hourly charts , whcih is also laminated with 200ema currently, on break above will be looking for some resistance at fibs above and possibly trip to bigger resistnace on the daily chart:

Cheers

Vlad

Hey Traders,

gold continues to be stuck in the range it has been for the past 3 weeks, considering the somewhat overbought levels would favor a push down to one of the support levels, preferable 200dma to try to pick longs. Here are the s/r levels I see:

Cheers

Vlad