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Thursday, 21 September 2017

So Rested He By The TumTum Tree

Stan and I are doing the first of two 'Trading Toolbox' free educational webinars an hour after the close today at theartofchart.net, and this one will be looking at the use of bollinger bands in day and swing trading. If you would like to attend then you can register for that on our September Free Webinars page. 

After an interesting start this morning ES settled down into the comatose tape that has been characteristic of afternoons recently. The morning was definitely interesting though, with the ES rising wedge support that was tested perfectly at the low yesterday breaking this morning. That hasn't followed through yet, but may follow through soon, ideally after just one more all time high retest. ES Dec 60min chart: 
The equivalent short term rising wedge support on SPX is now in the 2495 area and, as and when we see that, would be a confirming break. In the short term SPX has been testing trend support at the 50 hour MA, now at 2501, and that's holding so far. There is still a decent case, if possible, for a test of larger rising wedge resistance and that's now in the 2516 area. SPX 60min chart: 
Why would one more all time high be ideal? Well the last move up killed the negative divergence on the RSI 5 and it would be unusual to see a significant high without a daily sell signal on SPX. One more new all time high should set another daily RSI 5 / NYMO sell signal brewing. SPX daily chart: 
NQ is my concern here, as it is looking significantly wounded. A clear double top setup has made creditable efforts both yesterday and today to break down and if NQ can convert the monthly pivot at 5920 to resistance then NQ could start a serious slide down that would likely pull the other indices with it. On the bull side a 60min buy signal has fixed and is trying to reconfirm on the lower low today. If NQ can recover over the weekly pivot at 5985 then I still have an open bull flag target at the all time high retest (on NQ) at 6025. That could be a nice finish for this move, if NQ can manage just one more heave. NQ Dec 60min chart: 
Today and tomorrow are cycle trend days, which means that there are 70% odds that either buyers or sellers will dominate the tape. That didn't deliver today, which increases the odds that we will see a directional day tomorrow. Given the setup at the time of writing, that could go either way. 

This week's edition of The Weekly Call is posted and the model portfolio there is up 206% in the ten months to September 10th, now slightly over our target minimum 200% return over the first year. As that target has been reached we're thinking of making the strategy there a bit less conservative. That's a free weekly service and if you trade futures I'd suggest adding it to your reading list.

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