The market is stuck – – absolutely stuck in the mud – – for the past month. Range-bound. Contained. Dullsville. In any case, the blog must go on, so here are a few random remarks.
I mentioned yesterday how the big rise in the Euro might find the trendline to be a powerful force of resistance. So far, so good (see arrow):
Another day of bumping round slightly above the daily middle band so far. A retest of the high is really just a few handles away, but much of the last few weeks have been spent watching SPX repeatedly fail to retest the all time high at the time by a few handles. There’s a nice short term setup on ES to deliver the ATH retest but it remains to be seem whether that will be enough to get us there this week. This may just continue to kick around until after the Inauguration.
As and when the high is made, SPX is due a minimum 3.9% retracement from the punch over the weekly upper band a few weeks ago. That should get SPX much of the way back to rising wedge support, currently in the 2155 area. SPX daily chart:
On a percentage basis, this is my second-best performing short (second only to EZPW). I’m just crazy about this analog. I can see much, much lower prices ahead.
On ES I have two high probability setups looking for a retest of the high, which are the bull flag megaphone that has broken up and the failed ATH, though as ever during the last few weeks, crossing the few handles to that retest is taking a while. On SPX this is a backtesting of the daily middle band, which is holding so far. If SPX should break below it and confirm with another close the next day then the high would likely be in, but until then I’m still looking for that ATH retest. SPX daily chart:
I had an interesting experience this morning I wanted to share with everyone, particularly since by telling the story, it may save someone a panic in their own trading.
I entered the day, as I always do, short a large number of individual equities. One of them was symbol FTI.
On my portfolio screen (Interactive Brokers), it shows all the stuff you’d expect – – symbol, entry price, quantity of shares, value of the position, and net profit/loss. In the pre-market, the P/L for the day is usually $0, because there’s no trading in most securities, although a few outliers will have information.
The Euro has been strengthening ever since 2017 began, but it seems to me, based on the ETF shown below, that we’re up against a potential reversal point.