The markets and the government are shut down today to commemorate the death of Bush 41. The GLOBEX markets remained open overnight and recovered a small fraction of Tuesday’s losses. Here’s the NQ:
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As much fun as Tuesday was, and as cool as it would be for the market to go down every single day without interruption, we have to be cognizant of important areas of support. I’d like to point out the principal supporting trendline for the ES dating back all the way to the 2009 bottom.
There’s a town here in the Bay Area you’ve probably heard of called Oakland. You’ve probably also heard the famous phrase about it uttered by Gertrude Stein: “There’s no there there.” I’m reminded of this quote because of the “truce” announced. My instant reaction was that it was a nothing-burger, which was met with screams and cries of distress that it was, in fact, An Awesome Amazing Deal. But it seems it’s starting to dawn on the rest of the planet that maybe this kicking-the-can-down-the-road exercise does, in fact, constitute “no there there”.
For a while last night, it truly seemed to be the case, although I’m sorry to report most of the red has been washed away. Interestingly, the gap between Friday (pre-truce) and Sunday (post-truce) was almost perfectly sealed on the NQ.
On Sunday, after the Globex markets had exploded in a bullgasm, I wrote this:
As I’m writing this on Sunday around 7:30 pm ET, the four U.S. E-mini Futures indices have gapped up and are currently trading above a “chaos zone” of a trio of future-offset 5, 8 & 13 moving averages (green, red & blue), as shown on the following daily charts of the YM, ES, NQ and RTY.
Both the YM and ES are above the 50 MA (pink) and 200 MA (yellow). Both the NQ and RTY are trading under the bearish influence of a moving average Death Cross formation. The NQ is slightly above its 50 MA, but slightly below the 200 MA, whereas the RTY is below both of those.
On a short-term basis, I’ll be looking for price on all four E-minis to hold above, firstly the moving average trio and, secondly, their 50 MA to maintain a bullish bias, whereby we may, potentially, see them retest their highs of this year or even set new records before year end (the RTY will have to first break above its 50 MA).
Not surprisingly, everything with a ticker symbol is up right now. Since the “truce” was announced (AKA total Chinese victory, getting three months breathing room in exchange for an unspecific promise to buy some farm products from us), it’s bright-Christmas-green. What the bulls will want to see will be a steady accumulation of strength right through the close tomorrow. What the bears (if there’s any left) want to see is any kind of “fade“. In other words, if we closed up “only” 35 points on the ES tomorrow, that would be a victory. The key line is that red one. If we cross above 2824.25, the bears better apply for jobs as greeters at their local WalMart.
At the open Thursday morning there was a key common thread on SPX, NDX and RUT, in that all three were either close (SPX & NDX), or at (RUT) their key resistance trendlines from the all time highs. As I’ve been writing the falling channel resistance on SPX and falling wedge resistance on NDX have both broken, with RUT having already broken up earlier today.
What this means is that this move is entering a new phase, either setting retests of the all time highs or signalling retracement and consolidation before the next move down. The more obvious move is retracement and consolidation but we could see the high retests, and I’d note that the seasonality favors the bulls into late December, and that while all the hourly RSI 14 buy signals made target yesterday, the daily RSI 14 buy signals on SPX, NDX and RUT are still nowhere near target. (more…)
Before I begin, a couple of bits of business. First, some folks have been expressing an interest in the brokerage Tastyworks. If you want to sign up, for the love of Tim, please sign up for tastyworks here – – it doesn’t cost you any extra, and they throw me a few shekels for helping them out. Thank you!
Second, apologies to my PREMIUM customers for dialing back on my posts, but honestly, the G20 scares the bejesus out of me, and I promise to be more prolific once it’s out of the way. I am staying very light, as I’ve said ad nauseum, until this stupid get-together is over.
Today, Thursday, was basically Wednesday in miniature. Early weakness, strength out of the blue, and basically another bear-beating. Interestingly, the ES retreated from my “do not cross here” line (the high price of the previous “lower high”), but it’s horrifyingly close. (more…)
I treat charts with a great deal of reverence, bordering on mysticism at times. But there are times when even I am incredulous that a given object on a chart actually has any say-so in what the price is doing.
I was reminded of this tonight, because I noticed a strange blue trendline on a chart whose purpose I didn’t remember. I zoomed back to a bigger time period, and the anchor points still weren’t clear. Only when I backed up a full decade did I see the line, and it turns out to be the supporting trendline for the entire ES uptrend.