http://twitpic.com/h9086 - Why not 61% retrcmnt,200ma(purple) & trendline?
Cause its NQ weeklys?
ES Futures and Euro Currency Futures Analysis
Lets take a long at whats going on with x-King Dollar, Euro and the oh-so-precious metal.
Firstly, Dollar has been trading in the channel, and yesterday, after another round of rumors about replacement reserve currency, this time from UN , had made a new yearly low. It has also reached some very oversold short term conditions, so not expecting a push much lower than the bottom of the channel on this move.
Break of 50ema (red line) and some recent highs would likely take this to the top of the channel, break of which would also result in break of this falling wedge on the weekly charts, move above that level would like result in a very significant retracement, likely of at least half of the move down from the high into area of 200ema on daily and weekly charts.
On the same chart we can also see that gold has broken key long term trendline, and has completeled a big head and shoulders patter going back to 1Q of 2008. Target of this paticular formation is in mid 1300s. While backtest of the wedge is quiet likely, I would be very cautious in picking tops in this crazy metal.
Will be watching dollar index for clues on gold and euro, which tagged 61.8% retracement of the move from all time highs today and also tagged a trendline that came in play several times in past year or so. Besides this level there are really no bullish targets on euro besides some of the previous swings highs (blue lines)
While I will continue scalpig all the instruments in every direction to put some Ramen noodles on the table, it is nice to konw where we are in bigger picture. Shall market be approaching near term top, there might be some very nice swing opportunities in FX.
this market refuses to pullback for more than few hours with bullish sentiment and various market internals continue to set record highs, all that is rather irrelevand since only price pays and we (traders) have to make the most of intraday opportunities since only price pays.
Firstly, lets take a look at weekly charts:
ES weekly has put in a doji near the top of the wedge, suggesting some market indecision last week. This coming up pre-holiday week might be very similar considering it will be last week of summer and pre Labor day weekend week.
Another week of chop would make sense, considering above mentioned factors and similarity of June topping formation so far:
Above the wedge and 1044 swing high (blue arrow) there is a really thin zone going all the way up to 50% retracement of the whole bear market and possibly the top of the channel (weekly chart).
~1015 - previous breakout area, last week’s low and over the next few also supported by a trendline.
~ 1007s - 50% retracement from monthly low
If bears muster up more than 20 pts of downside I will bother posting more levels, for the past little while it has been a waste of time :)
Will be posting key intarday levels via twitter @esecfutures and here.
Good luck and good trading to all
Left is monthly, right is daily.
Now here is a zoom out view of the two, firstly 40yr old channel from previous weekly updates:
and sp500 daily:
Will keep watching key levels closely to start building bearish case, first ES support level at 1016.
Will post key short term levels in daily updates sometime tonight
After once-in-a-decade July lift off and continued momentum push through August, capped off by last week’s opex shakeout with a push to new highs, markets are now in the ignore zone, where good/bad news, earnings, currency events simply do not matter in the face of momentum and performance chasing funds.
For a month now market sentiment is at multi year highs and internals point to levels not seen in a veyr long time, namely stocks above 200 day moving average:
Lets zoom out several dozen years and see where we are in the big picture:
The backtest of the channel lines up right with October 2008 high (not that this high is a critical level, but bears are grasping for straws as far as resistance levels here) with the wedge resistance right below:
If bears to decide to put together a pullback of more than 2% off of yearly highs, here are the support levels to watch:
The chart is pretty self explanatory.
The top of the range is laminated with 50ema and channel right above, on break of both could see a bigger move up as dollar related sentiment is also EXTREMELY bearish and trade seems to be overcrowded.
Will post smaller time frame s/r levels for ES in the morning and as always will keep posting intraday market technicals & internals updates via my Twitter account @esecfutures
Good luck and good trading to all
next week is the last week of summer, which means we are likely in for some low volume choppy action.
http://twitpic.com/epmps $SPX zoom out time ~1050 - backtest of 40 yr old channel, 1120 - 50% retracement of whole bear market $$
(while sentiment and BS remain at record levels, technically, after new highs there aren’t many reasons as to why SP500 wouldnt reach those levels)
Dips continue to be bought relentlessly in this market. Sentiment remains at record highs. Only encouraging things for the bears (if there are such things 9pts off yearly highs after 50+% runup) is that late money is selling, as opposed to late day ramp ups. All that is rather irrelevant in this game of performance chasing momentum and whatever else you want to credit.
Technically, as you can see recent tape has been very much a rollercoaster, which resulted in two ?megaphones?, anyhow, heres a look at expected dip buyer / support levels:
Possible support levels:
998.5 - 50% retracement of today’s 26 point off the lows, also previous support level.
990 - 3 week 50% retracement,which already reacted once, and now also lines up with the trendline of last two lows.
984s - previous spike high, gap fill and also 61% line of 3 week retracement.
Target of 990 retracement play just happens to be 1028, which is almost exactly backtest of ascending trendline on the weekly charts.
(Click the image for full screen view. Chart courtesy of Fari Hamzei (@HamzeiAnalytics) and Scott McCray
While trading just ES, its also important to look at other indeces, today all Dow, Nasdaq and Russel all made a double top (at least for now):
Will be keeping an eye on those indeces for break above recent highs shall we rally, as they will likely lead ES higher also:
As always will keep posting updates on intraday technicals and internals via @esecfutures on Twitter.
SP500 has now rallied over 50% finding itself in a very interesting place, with bullish sentiment at all time record bullishness:
Sentiment, bias and overbought conditions aside, besides this retracement and trendlines there really isn’t much in the way of Sp500 retracing 50% of the bear market.
Market momentum continues to drive this higher further squeezing the bears with little to no concern for good OR bad news, earnings, econ data and dollar strength or weakness.
Here are some big picture support levels on ES - SP500e mini futures, that longer term dip buyers are likely to step in at:
Yellow lines also higlight two unfilled gaps that will come into play on any retracement towards higlighted support levels.
On hourly time frame will be watching / scalping these levels for further clues:
Chart is self explanatory, highlighted areas are expected support levels, purple line is 200ema and blue lines are the channel and the wedge that have been respected numerous times during the last 2 weeks.
As always will keep posting intraday market internals, technicals and charts via my twitter account @esecfutures and on this blog.
Good luck and great trading to all this week
some incredible currency moves last Friday. Dollar has clearly has been in steep downtrend helping fuel the recent rally.
After breaking down below two yearly lows for the dollar, it managed to close back above that support, with incredible bearish sentiment on the dollar with only ~3% dollar bulls earlier this week, the short dollar trade certainly seems to be overcrowded.
For dollar bulls to get something going they will need to make higher highs, with recent high laminated with 50ema, above there the top of the channel is expected to act as resitsance.
Euro has also made a huge move on Friday , closing back below the major trendline that euro has been bumping up against for few weeks:
Highlighted areas are expected s/r levels. On the downside will be watching recent low , laminated with 50ema, with two channels/trendline meeting right below. If those are broken MAJOR s/r level at 1.375 is expected to act as support. Upside is currently the path of least resistance, considering broken retracement and resitance lines. THe recent highs are expected to act as resistance. Other than very overcrowded trade and not many left to buy / get squeezed, tehre is really not much in the way of euro to the long side TA wise.
As always will post twitter updates about key technical euro levels on the blog and via Twitter @esecfutures
Feel free to sign up for the mailing list on the right to receive updates about latest posts
one of most historic months in market history is behind us, while I mostly trade off of 377tick & hourly charts, it is important to know where things stand in the bigger picture, so lets throw all the bias out the windows, rewind things 40 years back and take a look at monthly charts of SP500:
looking at monthly charts, there is no particular reason for SP500 not to trade up into mid 10##s to backtest the top of the channel, nor is there any support in sight on the way down , besides 40 year old trendline in low 600s.
3 key areas highlighted are backtest of the bottom of previous channel that Sp500 has now traded into, 38% retracement of bear market and backtest of trendline, 50% retracement of bear market and top of previous long term channel.
Now that we looked at resistance levels on large time frames, here are the levels that bears would have to take out to try to get something going to the downside, firstly a look at the daily ES futures chart:
Firstly worth noting are the two shooting star daily candles suggesting exhaustion of the move and indecision. There is unfilled gap at 975, major s/r level in 955-988 area, then previous resistance level of pattern not to be named (as it caused too much pain for too many people thx to whole planet looking at it) and then the same support level with now rising 200 day moving average.
On the hourly charts would first be looking for support in the retracement zone of recent run up which marked Friday’s low almost to a tick, below 200ema hourly and backtest of previous channel, with key 954-957 area below:
While in the last few weeks we learned that dollar strength, earnings, news or any other events are absolutely meaningless when there is great momentum behind the markets. Will be watching key levels mentioned in this upside to possibly start building bearish case; with all eyes this week being on the Dollar, earning and employment.
As always will keep posting key intraday levels and internals via my twitter account @esecfutures as well as some intraday and all daily updates right here on esecfutures.com
Have a great trading week
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Another crazy week coming our way with 150+ SP500 companies reporting earnings, record 235B in auctions and plenty of econ data to spice things up.
Over the past 2 weeks bulls have completely turned things around and now are in full control.
Weekly momentum levels have reached the most overbought level of this bear market, just above previous high reading, see orange arrows.
The two resistance levels also line up almost to a point with 23 and 61% range expansion targets of the first move:
The bulls are in full above 950 level. For bears to get anything going they would have to get it below that major s/r level. And the following trendline on the hourly charts that will be ke in watching for clues before the major levels in 950s:
Will continue watching the above mentioned levels for further direction clues and trading intraday setups.
The overbought level on the weeklys and market sentiment are some wanrings signs of possible move exhaustion, here is updated chart of Bullish Percent Index, that has clearly reached extreme zone:
As always will continue posting intraday levels and internals clues in my twitter account @esecfutures as well as daily uptdates here on the blog.
Great trading to all this week
very impressive OPEX week last week, while many signals were flashing long, nobody was execting a move of such magnitude.
SP500 took away 4 weeks of losses in 1 weeks move.
SP closed back inside the big channel going back to the start of the bear market. With what looks like little resistance all the way to 38% retracement from the very highs in 1015 area - which would also be almost exactly 23% range expansion of the rally from march lows.
Above there big retracement and trendline in the 1120 area on SP.
To start thinking about those levels ES/SP500 would need to get above this huge resistance band:
On the downside, last weeks lows in the area of major s/r band will remain key, with 100dma now also laminating in that area. As well as 200dma which will likely start flattening out soon
Conditions are very overbought, but with these rip-your-face-off-rally type deals they can stay that way for a rather long time. To start building bearish case would need to get below some moving averages on the hourly and get faster moving averages crossing down below slower moving averages, check out how simple 20×50 ema crosses on hourly were great indicators past fwe weeks (yellow boxes)
With major level on the downside being backtest of the channel right in 50% retracement area, which is also a gap. That will be key support level for the bulls to hold / bears to break shall ES trade down there.
Will be watching the uptrend line, break of retracement zone in 928s and for ES to make a lower low below 920.75.
After such parabolic move it is a bit difficult to chart smaller time frames, so will certainly have more charts and data available throughtout the week as more price action develops
As always will keep posting key levels and market internals developemnts intraday on my Twitter account @esecfutures as well as daily (and some intraday) updates here on the blog
Good luck and great trading this week