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ES Morning Update December 20th 2017

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ES Morning Update December 20th 2017

Futures are up this morning but they still don't look to me like they plan on making another higher high like they have done so many times in the past.  This time they look like a B wave up with yesterdays' down move being the A wave down, which means a C wave down should follow.  I say that because of how similar the pattern right now looks to the December 4th-6th move.  It had an A wave down that dropped the MACD on this 60 minute chart down below the zero line where turns are common and didn't stop and hook back up until around -3.3 or so.  It then moved back up to around -0.7 before rolling over again to make a lower low. Yesterday when I thought the MACD would turn back up and setup a negative divergence above the zero line for both peaks it instead kept falling down to a low of -2.5 before turning back up.  Now this morning it has reached about +0.7 and acting like it want's to roll back over again.  This suggests this move down from yesterday will breakdown into an ABC pattern with the C down yet to come, just like the 12/2 to 12/4 move did.  I don't know what the bigger picture wave count is so I'm not saying that the top is in and we are headed down for a nice correction.  Yeah, it could be but I really would just focus on the day to day moves for now.

Anyway, for today I think this rally will fizzle out and rollover later in the day with only a higher low today being made.  Then tomorrow I think we'll be heading down to that 2670 area where the rising trendline of support is located at as well as horizontal support from trading in that range in mid-December for several days.  The 6 hour chart already got a bearish cross yesterday with the A wave down move and has fallen from a high around +9.6 on its' MACD to +6.1 right now.  The Histogram bars also went from positive black bars to red bars.  This again suggests the move down yesterday is no over with yet and that it will breakdown into an ABC pattern instead of just one wave like so many in the past.

On another note... it's been a hard road for the bears the last year but January could give them the much needed correction they have been waiting so long on... which if the bulls are smart they will let it happen so they can have another strong year like this one.  We are in a massive bull bubble but who's to know when it will end?  It could add another 50% or more like the 1986 rally into 1987 did when Reagan passed his tax cut bill back then.  I can't see that far ahead and I doubt if very many can, so I'll just leave my guesses for today and maybe a week or so out.  And I'm guessing we rollover later today and into Thursday/Friday for a low from the expected C wave down in this most likely ABC pattern from yesterday.

ES Morning Update December 19th 2017

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ES Morning Update December 19th 2017

Looking at the various charts this morning there's no big change from yesterday.  It's still bullish and should be putting in that lower high on the MACD's today once it hooks back up on the 60 minute chart.  The 6 hour chart it still pointing up but hooking down a little, so it too suggests another day is needed before getting overbought enough to stop the bulls advance.  This doesn't mean that we'll pullback though, rather instead it means we'll likely stop going up tomorrow sometime.  It would take some news I think to cause a nice pullback.  What could cause that in front of Christmas is unknown?  So I would count on any surprises at this point.

However, once the tax bill is finally "officially" passed with ink to paper by all the Senators voting and not swaying back and forth on their decision there could still be a "buy the rumor, sell the news" event.  Meaning the relief from it being over with (remember, the market hates uncertainty) might result in some "end of the year" selling.  I wouldn't expect to much but with everyone super bullish right now a move down to prior resistance in the horizontal support area of 2670 is not out of the question.  After that we'll just have to take it day by day.

As for what I'm expecting today I'd say more of the same ol' sideways grind higher riding that rising trendline of resistance.  Yesterday was the stronger move up so I'm not expecting much today.  It's more likely going to consolidate early in the day and later in the day we could the MACD turn back up and put in a lower high to setup negative divergence for tomorrow.  But I doubt if the price level raise much, maybe 4 or 5 points, but another 10-20 points is not likely today.  Tomorrow we could see the move down happen if the divergence sets up and plays out.  Again, I'm not expecting a lot on the downside but there should still be a little as I'm pretty sure Santa arrived early this year and is getting tired.

ES Morning Update December 18th 2017

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ES Morning Update December 18th 2017

It's another sunny day with not a bear in sight, with Punxsutawney Bull up early again with a smile on his face as he knows this day will never end but keep repeating over and over and over and over and over and over again until one day the nightmare ends.  When will that be?  I don't know but in the famous movie called Ground Hog Day Phil Conners (played by Bill Murray) was trapped for 38 days.  One website claims he spends 8 years, 8 months and 16 days while another said he was there 34 years (12,395 days) to master becoming a master piano player, ice sculptor, etc...

Just out of curiosity I checked to see how long it has been since the March 6th, 2009 low until today and it's 8 years, 9 months and 13 days.  Since we are past the first time line, I guess we are on the second one... meaning the market is going up every day for another 26 years!

Of course I'm just kidding but it certainly feels this way as the bulls seems to never stop, just day after day of gap up opening that never get filled.  Everywhere I look there are new historical stat's being broken on how long this market has been going up without a (insert percentage here) pullback.  It's not a healthy market is going to lead to a disaster at some point down the road.  A normal market would have pullbacks and corrections so it could continue to stay healthy and grow over the long term, but there's nothing normal about today's market. So we either go long or sit on the sidelines as only bulls are allowed in this game.

Ok, enough complaining.  My thoughts for today are... bulls are hitting a rising trendline that started in October should provide some resistance.  This suggests it will slowly ride up the trendline today after the open adding a few more points but we should not see another 10 point move today on top of the current 10+ point expected open.  The 60 minute MACD is extremely overbought hitting +6 premarket but has since backed down a little.  It should turn back up and put in a lower high to setup negative divergence while the 6 hour works its' way up into overbought territory as well.  It could take another 1-2 from looking at it.  Even after all this happens I would not expect much of a pullback as volume is too light now that we are so close to Christmas now.  Overbought charts will likely be reset by holding the market sideways.  The tax bill is still being talked about on the news as this Senator or that Senator plays games on which way to vote on it.  But all looks good for the bulls today... again.

ES Morning Update December 15th 2017

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ES Morning Update December 15th 2017

I have to do this mornings' post a little early as I have a 9am (EST) appointment I have to be at, and won't be back for several hours.  Yesterday the bulls finally took a breather and the bears pulled the futures down to almost hitting the rising blue trendline of support.  It has since bounced back up from there and has recovered about half of the down move.  The 6 hour MACD is trying to turn back up but this 60 minute chart shows a MACD that went from oversold yesterday to now being at the zero area.  I drew a falling trendline to connect all the peaks on it and you can see it has quadruple negative divergence with 4 hits currently and this move up could make the 5th hit.

The only problem is that we did have a move down yesterday so the negative divergence has technically been fulfilled.  However, there's no guarantee that this down move is over with yet.  While that 6 MACD is trying to turn back up it hasn't done so yet, so we could see this 5th hit of the falling trendline on this 60 minute chart produce another turn back down and take the market with it.  But odds do favor a breakthrough of that falling trendline (on the MACD's) of resistance as you can see from a previous similar divergence with 3 hits back in late October to mid-November where it finally ended on the 15th when it pushed through it just as the market bottomed around 2555 or so.

I will note though that the down move produced then appears to have falling in an ABC pattern where the A down ended on 11/9, then the B up chopped for many days and finally the C down finished on 11/15.  Therefore, since we only currently have one wave down, we could still see an ABC move with today's move up being the B wave.  However, if the C wave down doesn't start within a few days I doubt if it will happen as we are too close to Christmas now and the light volume could overrule any patterns or technicals in the market.  There's basically one thing that can make this happen news wise, and that's the tax bill.  You can see that they've been talking about it again on the news as apparently some Senators are changing their minds.  We'll see I guess... have a great weekend.

ES Morning Update December 14th 2017

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ES Morning Update December 14th 2017

Well, the Fed's did as expected and gave us no surprises... so the bulls win again.  There doesn't appear to be any news left this December that could cause the market to drop un-expectedly but this technical picture still says a pullback is much needed, and I mean before Santa arrives.  Again we look as this 6 hour chart and we see a bearish cross on the MACD's with a negative divergence already formed.  So if there's ever a good chance for a pullback to start it should be soon, like today or tomorrow.  But if the bulls can hold the line and trade sideways for the next couple of days they could get the Histogram Bars deep enough to turn the MACD back up and make a triple negative divergence and put in another higher high.

So I'm not holding my breath on any pullback of much degree as it wouldn't surprise me to see it trade sideways for awhile before it resets enough to stage another strong rally up.  Yeah, it should pullback... but lets face it, this rally has been so controlled and manipulated that corrections are just not allowed.  I read an article somewhere that said there has never been a time in history when a rally has lasted so long without even a 3% pullback... that's NEVER in the entire history of the market!  I may have gotten the percentage wrong a little but you get my point.  This market is not logical and bearish setups just aren't allowed to work.  It has all the makings of a blow off top before a massive crash... which at this point seems to be pointing to sometime in 2018, probably July/August for the start of it would be my guess.  The first cracks should be this coming January.  But for today I don't see much and have zero idea on where the market is going.  When it looks bullish, it rallies... when it looks bearish it rallies.  Anyway, good luck trading today.

ES Morning Update December 13th 2017

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ES Morning Update December 13th 2017

The Democrats won the Senate in Alabama last night and the futures yawned with a small dip that got completely erased this morning.  Today's FOMC meeting is all that is left that could shake up the market.  Failure to do so would likely mean the bulls will continue this slow grind up into the end of the year.  This rally is looking more and more like the Bitcoin rally, which now has officially surpassed the Tulip mania bubble... and we all know how that ended!  Needless to say that picking the top of this insane move up over the last year or so has be futile to say the least.  But just like that Tulip mania bubble in the 17th century finally came to an end and busted so will this "Stimulus Rally"... and it won't be pretty.

Until then we have to just play it day by day and I don't see anything for today that suggests it will rollover (except the usually negative divergences everywhere, extremely overbought charts, light volume trading, historically low VIX readings, complacency, and others I can't remember).  So a surprise by the Fed's today at 2pm is all the bears have left I guess.  I'll continue to refuse to chase this market higher without a decent pullback to get a good long spot at as I feel it's like buying Bitcoin right now... which I think is about as foolish as gambling in Las Vegas thinking you can beat the house.  Anyway, for today the 6 hour chart here of the ES Futures shows you how overbought the MACD is and how the Histogram bars have fallen back down to the zero level, which under normal circumstances would indicate a market about to pullback a little... but what's normal in this insane market anyway?  To the moon Woody the bull... and Buzz Lightyear would say!  And we all know that was real too... don't we?  ROTFLMAO!

ES Morning Update December 12th 2017

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ES Morning Update December 12th 2017

Not much to add today that wasn't said yesterday.  The most important market moving event this week is the FOMC meeting tomorrow.  If they raise rates then there might be some pop higher but I still think it will rollover afterwards like the pop higher did a week ago on the Monday following the passing of the tax bill.  This FOMC meeting should be no different... another "buy the rumor, sell the news" event.  Of course if they surprise everyone by not raising rates then look for a sharp drop, other wise it should be another pullback into the remainder of the week.  Santa isn't here yet as many traders seem to think he is, but the Santa rally doesn't really start until the day after Christmas so the market can still pullback before then and all will still be well for the bulls.  Anyway, for today I have no opinion on what might happen.  The futures are just .50 cents from a new all time high so it could easily push on through if it wants too... or just stop here and see if the bulls bite and go long while the bears bailout expecting a rip higher as well.  Nothing to do but watch today as I don't see any good setups short or long.

ES Morning Update December 11th 2017

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ES Morning Update December 11th 2017

This week we have the FOMC meeting where they've told us in the past that this is the meeting where they will actually raise interest rates.  So, everyone is expecting that to happen, therefore there shouldn't be any surprises if they do raise them.  The surprise will come if they don't raise them, and that should cause a drop in the market as this rate hike is priced into the market right now.  But we don't know the outcome and can only wait for the day to come and past before we will know.

In the meantime we are back to charts to try and beat SkyNet at it's game... or at least figure out it's next move.  Currently when I look at the various charts of both the SPX and the ES Futures I don't see a move down today but more likely a struggle for the bulls to rise much higher.  And it looks like the tiny pullback this premarket might have been a wave 4 down with a wave 5 up yet to come... which again should be weak as there's a lot of resistance overhead and various chart alignments that suggest this is still nothing more then a B wave up with a C wave down yet to come.

My thoughts are that today and/or tomorrow the market will setup for that C wave down.  I do not see another higher high here but can't rule out SkyNet and its' consistent support and manipulation of the bulls.  It might just boil down to the results of the FOMC meeting?  If rates are raised as expected then they might pop it up to that new high like they did that rally up last Monday when the tax bill passed, only then to reverse and go back down.  It would be another "buy the rumor, sell the news" event.  Of course if there are any surprises from the meeting (like, NO rate hike) then I'd expect a bigger drop to happen as everything is price in for this rate hike to happen.  Either way, a move down likely is coming.  So for today I'll just wait and watch as the charts setup themselves for the next big move... which I think will be down for this C wave to end the pullback and allow a nice rally up from Santa to start.

ES Morning Update December 8th 2017

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ES Morning Update December 8th 2017

The futures are up again this morning, extending the bounce from the recent low and are now in the 61.8% retracement area.  If this is just a B wave up and not the start of another rally to new highs then this area is about where it should stop at.  It's just riding that red rising trendline of resistance up right now and might do so all day, or just go sideways.  The 6 hour chart suggests it could hold this level for a bit before going back down but the 60 minute charts is quite overbought and could roll at anytime.  Tough call here but my guess is there's little more on the upside today and a sideways day is more likely until the close.  Call it more of a range-bound "expected" day, where it might go up to +10 or +11 on the high side and possibly drop to +5 on the downside.  Odds favor it holding this area all day as where I previously thought we could see the smaller wave 1 down and 2 up today, for the larger C down, it's looking now like that might not happen until over the weekend.

Overall I still think this is just some kind of B wave up that should end today, and a C wave down starts next week.  I will add that there is a FP on the SPY back on 12/4 that shows 266.19, but I ignored it at the time as I thought it was a late fill due to the market trading in that area that day.  But if this market continues up then that is the level it's likely going to.  SkyNet has a habit of extending further then one expects so I won't rule it out completely.  Yesterday it was looking pretty weak with only a 38.2% retracement achieved but that changed this morning obviously.

I don't know if this old saying still works or is valid but in the past it was common for the market to have a reaction in one direction (up in this case) after the Non-Farm Payroll reports (released this morning at 8:30am EST) only to see it go the other direction (down) the rest of the trading day.  The old saying was to buy the dip on it and sell the rip.  I noticed it worked a lot in the past but I never noticed some huge move in the other direction during normal market hours, but instead it was common to see it drift slowly up or down throughout the rest of the day.

Anyway, a high is expected today if the FP isn't valid or Monday if it is valid.  Fake Prints are hard too read and shouldn't be traded off of but I must say that when the market goes in the direction of a previous FP it's common for it to be hit (plus or minus a few cents is considered as "hit").  Next week I do expect this C wave to happen as I do not see this market as ready yet to rally strongly, and Santa isn't here yet either, so have a great weekend everyone and expect the un-expected next week.

ES Morning Update December 7th 2017

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ES Morning Update December 7th 2017

This morning isn't a whole lot different then yesterday from the looks of the futures this morning.  But, there is a difference in the charts.  The 6 hour MACD (not shown) has hit the zero area where turns are common, and it's trying to hook back up.  On this 60 minute chart we see the MACD's getting oversold yesterday with a -4.2 reading and rallying all night to a +1.5 where they ran out of fuel and rolled over.  Now they are around the zero line, again... where turns are common.  But here's the tricky part, if a turn back up doesn't happen (which would have setup positive divergence) then the next move down should put in a lower low for sure.

On the flip side of that you'd think we'd get a strong rally from the positive divergence working, but I'm not so sure.  I'm thinking we do not drop for a lower low but don't rally hard either, instead I think a small rally will happen.  Looking at the daily and 60 minute charts of the SPX, which lags the ES, we are still very overbought on the bigger picture and only short term oversold.  That suggests too me that we'll rally for a day, maybe two, but we should only put in a lower high and then roll back over again next week some time.  For today though I could see a 10-15 rally that hits resistance around the red rising trendline pointing to 2645 right now.  I can't tell about tomorrow yet as it's too early and I won't know until the close today when I see where both the SPX and the ES charts are positioned at.

Maybe they get very overbought and setup a drop to start on Friday or maybe they need another day of grinding up to work of the short term oversold conditions, I just don't know yet.  Let's just focus on today for now, and so far it looks like we had an A wave up from the low yesterday, which pierced through the upper trendline of resistance of the falling channel, and now we are in the B wave down to backtest that trendline again before turning back up at some point to make the C wave up.  This is the move that could go up to that rising red trendline of resistance before stopping.  It would then imply that the move down from the all time high finished its' first wave and this move up is its' second wave (broken down into an ABC pattern).

So, I do not expect this to turn into a 5th wave down now.  I'm now thinking the move down from the high to the low yesterday was an ABC inside a larger A wave down (or wave 1?).  Then we are in the larger B wave up now (which has divided into a smaller ABC with us currently being the B down and expecting the C up to start today and end by the close... most likely).  If this is right then Friday we should start the larger C wave down that should breakdown into 5 smaller waves.  It would not be unusual to see smaller wave 1 down and 2 up tomorrow to fool the most people as they would not know which direction would be next most likely... especially if the wave 2 up was strong and almost retraced the entire smaller wave 1 down.

This is a tricky move by SkyNet and one I think it could do on Friday, especially if we get the smaller C wave up today into that rising red trendline of resistance to finish the smaller ABC up inside the larger B wave up.  So, I'll be looking for a bottom here early this morning and a reversal into the close for that pattern to play out.  My wave counts are based mainly on what I see in the technical picture of both the SPX and the ES as I try to "forward look" where it might go next.  It's always a guessing game but I'm no expert on Elliottwave and that's the best way I know to fit the waves up as I understand the technical analysis much better so when I see a strong move up or down forming it's usually a C wave or wave 3 in Elliottwave.

Anyway, I keep it shorter term as the big picture is something I leave for other experts to forecast.  So, my thoughts for today are simple... look for an early low that reverses and runs back up into the close with the red rising trendline as the most likely stopping area.  If this reversal doesn't happen early today I'll still be watching as it's possible that it drags into Friday morning or even later today near the close.  But I do think we have a temporary bottom in from yesterday and the next move is up.

ES Morning Update December 6th 2017

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ES Morning Update December 6th 2017

So far this move down looks too me like we put in an important top and change in trend.  Now I'm not saying it's the final high before a crash as we still have the end of the month Santa rally that "could" take us to new high again.  But odds tell me we do have a short term top.  I have several reasons to think that, and one of them is the technical picture.  Another is the passport code (explained on my "codes" page of my blog) as the market hit the high on December 4th where I have a passport from the movie "The Equalizer".  Another clue is how close the top on the SPX Index was to the ritual number 666 (we hit 2665.19) as the bottom code for the March 2009 crash low was also a 666 (666.79 to be exact).

So, when I add up all the clues I have enough evidence to suggest at minimum we have a short term top and at maximum we have the final top before crash.  One more example of the "eleven" code (666 is of course the mark of the beast in the Bible but it's also a multiple of the number "11", like 22, 33, 44, 555, 777, etc...) being used to mark the final high for the year before a crash was on August 25th 1987 when the SPX printed an intraday low of 333.33, with the high of 337.88 and close of 336.77... plus, just to make sure you didn't miss the coded message, they opened with 333.33 and closed with 333.33 the day before.  Clearly that was a coded "eleven" message to the insiders as the top was put in on the 25th of August and the market then continued down until it crashed later that year in October.

The question now is... "does the 2665.17 high signal a top"?  Back in 1987 not many people knew of the elite and their rituals they do with numbers, but now with the internet exposing them a great number of people look for ritual numbers as clues.  Therefore they might be inclined to be a little less obvious with there codes and just get within a point of some ritual number instead of an exact hit... like the March 6th, 2009 low.  Plus there's also the fact that computers track every tick now so if SkyNet was unable to hit an exact number it's much harder to adjust it after the close like it would have been back in 1987 when people were still involved in trading and tallying up the final numbers.  The bottom line is, there's a lot of reasons to believe we have put in an important top... and "maybe" the last top before a crash?

Moving on to the short term. For today it looks like we might have had a wave 1, 2, and 3 down of A down that ended at the overnight low of 2620 on the ES Futures and that we are in a choppy wave 4 up today.  I've drawn a falling channel and if this wave count is correct this small wave 4 up should stall out at the up trendline of this channel, leaving a wave 5 down into Thursday likely for the end of this A wave down.  Odds would favor it hitting the low trendline of the channel which also lines up with the recent Friday "mini-crash" low, so a retest seems likely at this point.  I was given a new FP last night from a friend that only showed up on Yahoo Finance.  It's on the SPY and it's quite a bit lower then where we are now so it might not hit until some time in January?  Anyway, I'll post it in the room.

Back to this A down, which is expected to bottom Thursday, I'd expect the B wave up to start afterwards and should be a strong wave on Friday... meaning I'm thinking it's going to sub-divide and the C wave should show up on this day.  Therefore Thursday should have the smaller A up and B down of this larger B wave up.  I'm guessing that this B wave (again, I expect it to divide into a smaller ABC) will end next Monday and we could see a reversal back down that day for the larger C wave (and it should breakdown into 5 smaller waves).  This whole larger ABC down should end by the 18th of December I think (plus or minus a day or so).  Then Santa to the rescue.  This is all just speculation of course and subject to change.  But for today let's keep it simple and look for that small bounce to carve out the small wave 4 up and expect the 5 down tomorrow.

ES Morning Update December 5th 2017

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ES Morning Update December 5th 2017

Well, looks like I got yesterday wrong as the bulls failed to hold the line all day and instead dropped into the close to fill the gap up open.  Maybe they should have thrown two men out of the balloon basket instead of one... LOL!  It's back to the "buy the rumor, sell the news" event, which worked this time but fooled me with the last move up to new all time highs yesterday before "selling the news".  It a hard market to predict as SkyNet throws you curve balls right when you mastered its' fast ball.

Anyway, at this point it's looking more and more likely that the high was put in yesterday and a several week pullback is happening.  Odds favor a retest of last Fridays' low at this point versus another higher high.  But the short term chart got oversold quite a bit yesterday so we could do that sideways "pause' day today I guess... meaning yesterdays' drop was some kind of A wave down and we should see a B wave up today.  Whether it is a strong B wave up or slightly up (mostly sideways) is hard too say.  With the Nasdaq selling off the fastest yesterday it's a sign to me that insiders are dumping hard as they know a pullback or correction coming.

That also suggests that we might not see the usual strong B wave up that is common in a trending up market, as if the trend has changed to down then bounces should be weaker.  Do I think the trend has changed?  Yes, I think we are in a down trend for awhile and even when Santa comes later this month I still think the big picture will be a down trend and that the end of the year rally will just make a lower high, sitting up January as a down month for what I see as a big ABC move which should end in early 2018... maybe January, but could be February or March at the latest.  Anyway, for today this again looks like the B wave bounce.  How high is goes is anyone's guess.  I think it will be weak, like a lower Fibonacci level of 23.6% or 38.2%, not much higher.  I remain bearish for now looking for Friday's low to be retested within a day or so.

ES Morning Update December 4th 2017

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ES Morning Update December 4th 2017

Man... those bulls are tricky!  Last Friday I was looking for a high to be put in like what we are seeing today and then the Friday mini-flash crash to happen Monday, but it happened midday on Friday when I wasn't expecting it too.  It took out a lot of bulls on that fast move down as it hit their stops.  Then it reversed hard into the close to regain over half the move down.  I'm sure a lot of bears went short then and are now going to be feeling some pain at this mornings open.  And even worst is that the mini-flash crash on Friday wipe-out out a lot of "short term" bearishness... meaning there's no real reason today to get short as it's more then likely going to do a lot more "shaking and baking" up here at these new highs before it's going to pull another mini-flash crash move again.

The bulls pulling a stunt like last Friday was kinda like them being on a hot air balloon with 5 men in the basket.  It has a leak in it (still does) and was losing altitude slowly over the past several weeks (super light trading volume), but managed to stay up in the air by hitting pockets of updrafts to keep it rising back up and not hitting the ground (those updrafts were positive news stories, earnings reports, etc...).  Last Friday the men were running out of tricks to keep them up in the air and the balloon was over ocean waters where they would surely drown.

So they decided to pull the worst kind of stunt possible... sacrifice one of their own men! Yep... that mini-flash crash was the 5 men reduced the load in the basket by tossing out someone to reduce the count to only 4 men.  It now will buy them more time (probably until end of this year) floating up in the air but eventually they will have to do another sacrifice, which should be bigger as with time passing more and more air is leaking out of the balloon.

At this point the men will likely get past the light winds of early December (the first half of it is commonly bearish) where the balloon stays just slightly above the cold ocean water, and they will then make it to the heavier winds area the second half of the month to lift back up to higher altitudes where they feel safer (the Santa rally).  So while the men knew they were in for a "touchdown" into the shark infested waters this mid-December they will likely avoid it now as they choose to sacrifice on of their own to save the others.  The sharks below (the bears) will have to wait for another time to feast it seems... most likely in January of 2018.

My thoughts for today... probably choppy, just a sideways day to hold the new ground they reached.  Upside seems limited now as the euphoria of the tax plan being passed is likely already built into this gap open this morning.  So while I wouldn't short it today (and glad I decided not to short at the close on Friday), I also wouldn't go long as it will likely stall out and not make much more headway up this morning.  As for the possibility of a move down, I think we could still see one but it doesn't look good for today.  And the most bearish period is the first couple of weeks of December.

So even if it starts down later this week or next week it should be a small move down, not some big correction of 7-10% like what "would" have been possible with a "NO Vote" on the tax bill.  Maybe they retest the low on Friday over the next two weeks?  But I really don't see them give up right now after they worked so hard to reach this level.  Anyway, I see no clear direction for today or possible trade setup on the long or short side.  Maybe tomorrow I can get more clues to the next big directional move?  Or later in the day their might be something show up in the charts (like negative divergence), but there's no trades for me at the open.  Anything new that changes my mind will of course be posted in the chatroom.  For now though I doubt if I will be taking any position today and will just be watching for the next setup... bullish or bearish.

Another 9/11 may be the black swan event that triggers global stock market meltdown

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Another 9/11 may be the black swan event that triggers global stock market meltdown

Major financial institutions like Bank of America see the end of the bull market next year. They predict stocks pushing higher in the first half followed by all sorts of potential trouble after that.

Some experts say the new crisis could happen because of economic factors like an inflation hike or tight monetary policy by the US Federal Reserve. However, the crisis is much more likely, if an external shock hits the world, warn analysts.

“In general, this can be any significant event, for example, military actions. The effect will be stronger if negative events happen one after another. In such a situation, there can be a plunge in stock prices and deleveraging would start. All risky assets will begin to get cheaper in a spiral. This is the standard development of the crisis,”financial analyst Timur Nigmatullin told RIA Novosti.

According to the analyst, geopolitical risks are difficult to predict and can happen without notice. At the time of terror attacks like 9/11 or military actions, hyperinflated assets are most vulnerable.

The S&P 500, the American stock market index based on the market capitalizations of the 500 largest companies listed on the NYSE or NASDAQ, has grown almost 40 percent in a year and a half. The index has been increasing steadily since the financial crisis started a decade ago, when it slipped 38.49 percent, its worst yearly percentage loss.

The other probable risks for the global economy include the crisis in the Italian banking sector and likely difficulties facing the Chinese leadership handling ongoing economic growth.

“In the near future, Chinese society must adapt to its higher income and deepen integration into the global economy. When this transformation begins, there may be a capital outflow from China: investors will be afraid of possible problems in this direction," Nigmatullin said.

The black swan theory was developed by author Nassim Nicholas Taleb to explain an event that comes as a surprise, has a significant effect, and is often inappropriately rationalized after the fact with the benefit of hindsight. The term is based on an ancient saying which presumed black swans did not exist, but the saying was rewritten after black swans were discovered in the wild.

ES Morning Update December 1st 2017

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ES Morning Update December 1st 2017

Man... this market is crazy!  I'd love to have been long the last few days but I wasn't unfortunately.  But who knew it was going to explode straight up for 3 days in a row?  Not many I'd say, as most traders are in as much shock as I am seeing this bull run as hard as he has.  It has all the makings of a blow off top, but where does it end?  It's all about getting the tax bill passed as everyone is front running the vote that they all assume will be passed.  I'm not a fortune teller so I don't know if it's going to pass or not but it sure reminds me a lot of the BREXIT vote, where no one was expecting them to leave the EU... and you know what happened back then!  If this tax bill gets voted down this market is going to tank super hard next week.

There's still no final vote just yet but it should be completed today or this weekend from the looks of things.  Like I've said several times lately, even a YES vote should cause a pullback of some degree as I firmly believe this is another "Buy the rumor, Sell the News" event.  And if it's a NO vote... you'd better not be long going into Monday, that's all I got to say.  But assuming it's a YES vote there might be some carry over move up into Monday but it should end fast and a pullback start.  There should be at minimum a retest of 2600, but really it should find support at the prior lows around 2542 into mid-December and then rally back up to erase it all with the Santa rally.  It's hard too believe that right now up at these sky-high levels but it's really a small pullback for a YES vote.  If it's a NO vote then I'd expect a fast drop of 7-10% into mid-December. Yeah, that's a crazy call to, but it's can happen.

But for now we don't know what the vote is but everyone thinks it's a YES vote so assuming it happens I'll be positioned short by the close and expect the small pullback into mid-December.  Either way the vote goes I'll be short by the close.  I still little upside left and will ride out any follow-through excitement on Monday from a YES vote as it should still rollover shortly afterwards in my view.  My thoughts for today... flip a coin?  Could chop around or have another screaming rally... I just don't know?  Considering the depth of the pullback after-hours and now the bounce back up I'd expect more of a choppy day as that's the first time we'll seen a decent move down happen in the last 3 days.  That signals to me the bulls are getting tired... finally!  So have a great weekend everyone and prepare for the "unexpected", as next week should be even more interesting then this one.

ES Morning Update November 30th 2017

Red
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ES Morning Update November 30th 2017

The last few days I haven't seem to be getting any calls correctly.  And it seems to happen to me the most when a top or bottom is occurring as wild swings make it hard to read I guess.  Anyway, I'm still seeing a move down coming but it's not looking like it's going to start this week.  It's tricky right now as they try to shake out both side before they drop it but I firmly believe a drop is coming that will be a nice one.  This tax bill is the key I think and while we here rumors of it being voted for today or tomorrow, others say it will happen over the weekend.  Whatever the vote is the market should sell off after it.  And again, if it's a no vote we could see a hard drop into mid-December.

For today it looks like we are in a 5th wave up with yesterdays' drop being the wave 4 down.  I'm not sure if it ends today or Friday?  At this point it's just a guessing game on trying to pick the top.  But there's mega-resistance in the 2630-2650 zone so we are up there in that range, so there's not much more to go for the bulls.  And so far this mornings' rally up has not taken out yesterday's high... but it's super close, like within pennies of it.  Meaning that we could have topped yesterday and did the first wave down and right now we are in the retracement back up.

Again, it's hard to know for sure as it's so close to just breaking on up through to another higher high that most traders won't know whether they should short it or go long expecting a breakout.  I don't know the answer either but I'd lean toward it moving higher as it's got all day today to do so instead of seeing this kind of move up into the close, which would leave you guessing about the next day.  All I can tell you is that I plan to be short before this weekend as starting the correction and going down nicely.  Catching the exact top is very hard and very rare, so I'll just take my best shot before the close on Friday.

Bank of America: Flash crash in 2018 then war to follow

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Bank of America: Flash crash in 2018 then war to follow

In its analysis for the first half of 2018, Bank of America is warning investors of a “flash crash” the likes of 1987, 1994, 1998. And  it warns that the central bank policies that have created the current conditions can’t be reversed, leading to an inevitable war to follow the crash.

In 1987, known as “Black Monday,” global stock markets lost huge portions of their valuations, ranging from 60 percent in New Zealand to 23 percent in the U.S. In 1994, the Great Bond Massacre saw global bond markets collapse, starting in the U.S. and Japan, resulting in treasury rates skyrocketing through the first nine months of the year.

In 1998, the Dow Jones Industrial Average saw its greatest single-day point loss of 512 points. The collapse was brought on by major financial crises involving the “emerging markets” in Russia, Thailand, and Poland.

The bearish outlook is based on large part because the investment script has been flipped from beginning to end of 2017. Going into the new year, the markets will be “positioning now long, not short; profit expectations high, not low; policy close to max stimulus; peak positioning, peak profits, peak policy stimulus means peak asset returns in 2018.”

The report strongly suggests the “tech bubble” is about to burst, if not in 2018, then early in 2019. It also hints at the very strong possibility of civil war, possibly boiling over into a global war, as a result of the very policies that have gotten us where we’re at.

The analysis strongly recommends buying gold now.

When Bank of America warns us in advance it's got to be a "cover their ass" news release.  Now the real question is... when is it going to happen?  What if it happens in 2017?  What if Trumps tax bill doesn't pass?  Today is November 29th, 2017 as I write this and the bill passed congress already but not the senate.  If it fails there I could see a flash crash happen right afterwards.

Red

ES Morning Update November 29th 2017

Red
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ES Morning Update November 29th 2017

WOW... the bulls sure pulled the rug out from the bears yesterday!  I have to say that I really didn't think they had it in them as the charts were looking too bearish but one thing that never ceases to amaze me is how the bulls seems to put it together at the very last minute and start another crazy rally.  It was my own fault for not seeing a rising trendline (which I now drawn in and colored orange) where the bulls hit it and were forced to rally from it or cross it and lose their momentum up.  A cross of it would have probably let the bears take control as the MACD's on this 6 hour chart were acting perfectly and just ready to roll back down and take the market with it.  Now they look strange as the hook back up appears un-natural like it was a manipulated one.  Regardless of what it is we can now clearly see it went from normally overbought in the +5 area to massively overbought up near the +9 level.  On top of that the market is now up (very close) into a very tough resistance zone between 2630-2650, so I would not expect it to get through on the first attempt.

I still think that we are about to start a correction that will last into mid-December and will shave off a 100 points on more from whatever high is made in the next day or so.  The high might be put in today for all I know?  But this resistance area is a tough one and while some people think it might just consolidate there for a month in a choppy range between something like 2600 up to the 2630 something high I think it's too overdue for a correction and will revisit the prior lows at 2542 before ever going back up and breaking that resistance zone.  There was some heavy volume yesterday on that rally up and that smells of "capitulation" of the bears... meaning everyone is now long, and you know what happens when the boat becomes lopsided.

You also have the "normally bullish" month of December next where no one believes the market will correct in but I think it will.  Don't forget that the Santa rally doesn't start until after Christmas day so a lot can happen early in the month for the bears before Santa's bulls take back control.  There's the FOMC meeting in mid-December to be concerned about where the Fed's are scheduled to raise rates.  Failing to do that could cause some selling as the rally has that rate built in already.  Then there is the tax bill vote which I believe is now scheduled for this weekend.

Of course crazy rocket man launched another missile in North Korea yesterday as well, but it didn't shake up the market too much.  Any bad news can be used to accelerate a down move once it starts and while we aren't there just yet we could be by as late as this Friday.  The technical picture just keeps getting pushed to extremes and with mega-resistance overhead I'd think that will be the area where it burst and the correction begins.

For today though I see a little more upside but it will probably be more of a sideways day to consolidate the gains from yesterday.  If I had to guess I'd say we'll put in the high today, pullback small tomorrow and back up for a lower high on Friday... leaving everyone feeling safe and secure that the tax bill will pass and Monday will start another rally higher.  Sorry, but I have to take the opposite side of that and will be short by the end of this week as no matter what the vote is on the bill I see a move down coming.

ES Morning Update November 28th 2017

Red
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ES Morning Update November 28th 2017

This morning we see the futures up slightly but basically flat. It appears the bulls are tired here and just holding the line (the 2600 level) until they can regain their strength (reset the overbought charts) and make another move up. It may come on some good news from the tax bill later this week as by then they could have reset most charts to neutral where it could turn back up and rally hard, or drop like a rock from some negative news. It's at one of those points where anything can happen. One can argue that the market can continue much higher from looking at certain charts and someone else can say it's going much lower looking at a different chart.

For example, the monthly chart and the weekly charts are clearly in a rising uptrend, which is bullish. But they have negative divergences building up, however they are such longer term charts that the market could rally for quite a long time before it takes affect. On the daily chart we see it in an uptrend still, which is bullish. But it has negative divergence as well and already lost half of it's positive MACD falling from +20 down to +10 right now, which is bearish. The 60 minute chart also has negative divergence, which again is bearish. It tells me that we are close to a pullback regardless of what the outcome of the tax bill is. So a "Yes" vote should cause a small pullback and if by some crazy reason they vote "No" then we should see a very big drop... possibly a mini-crash. Again, I'm not expecting this to happen as longer term the market is still bullishly aligned, and it's almost December when nothing bad in the market ever happens.

So odds are good that we'll only see a small pullback of 100 points or so... maybe less. For today though it's looking like another boring one where the bulls just keep on grinding up inch by inch getting the charts more and more overbought while we wait for some news event to trigger the next big move. I think it will be down but others think up. I personally think it's going to be another "buy the rumor, sell the news" event on a positive outcome of the tax bill, which is why I think it's going down. How far down is determined by the vote I think. I also think that it would be better to do the vote the day after Christmas when Santa can rally the market into the new year. That would be the ideal time for the bulls.

For the bears you'd want a vote this week or early next week as it's not uncommon for small pullbacks to happen in the first half of December as big institutions close out positions for the year to lock in gains. Then Santa saves the day by reversing any drop created early in the month when he rallies it back up into the end of it. Bears could uses this slightly bearish period to gain some more points to the downside once the vote is overwith and the "sell the news" part kicks in. Anyway, for today I'm again just looking for some chop with a slightly bullish skew. Upside should be limited.

ES Morning Update November 27th 2017

Red
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ES Morning Update November 27th 2017

It's that time again... to go back to work slaving yourself away at trying to make some money trading this market successfully. Hopefully you are all rested up now and tired of turkey leftovers I am. So what's going to happen today you ask? Great question... and we have some great clues to answer that one. Looking at this 6 hour chart of the ES Futures this morning we it peaked in the +5 area and is about to rollover now. We see the MACD's coming together very closely with the black line still barely above the red line, but almost crossed. This shows exhaustion on the move up and I think it will lead to a small down day today.

Then if all goes well it well these MACD's will have drifted a little lower by tomorrow and will try to turn back up and make another move higher in the futures. While most forecasters are looking for 2630-2650 before this move ends it's not looking like it's going to make it there this week. Instead I think we'll top in the 2605-2615 area by Wednesday and then this MACD will ready to go down (with a bearish alignment of course) and take the market with it. It should take the market down to reset the prior low from 11/15 around 2555 or the 10/19 and 10/25 lows around 2542 over the comings few weeks. After that I guess Santa will save the day and rally us back into the new year. For now though we should be just two days from a top, like either tomorrow or Wednesday should be it from what I see in this chart along with other charts of various time frames.

There's another clue that must have been a signal to the insiders. It's a "possible" FP on the VIX at the end of the day last Friday. It shows a spike low that I don't think is real. It looks like a fake print to me and if they rally the market up more into mid-week the VIX could drop down to that low, which to me would be a perfect place to short the market. I'm not 100% sure it will happen as I'm mainly focused on seeing a top on Tuesday or Wednesday in the 2605-2615 area, but if it coincides with the VIX hitting that low then it's just more icying on the cake I guess. Again, for today I don't expect much. It's leaning more toward a small red close but if it's green it too should be small. I see just some light volume chop today as it's the first day back after the long holiday and traders won't likely be doing very much.

Midday Update on possible coded message...

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