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ES Morning Update May 3rd 2017

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ES Morning Update May 3rd 2017

The futures are down a little this morning before the open but almost flat as they are still in the trading zone created over the last week.  Since the market is waiting on the FOMC meeting today to give it the next direction I have to think that the trickiest move would be a "non-reaction" to the meeting, meaning NO big move in either direction.  I'm sure there are ton's of bears waiting to short the double top area, and might not be shaken out by a move of 5-10 points over that level?  Bulls still long might be thinking the same as most double tops are at least a stalling point for several days, so it would be logical for the bulls to sell their longs there.  But how can SkyNet trick both bulls and bears if it hits the double top and pierces it by a few points?  You have to think that if everyone is looking for the same thing then "they are the crowd" and you don't want to be trading the same side as them.

So, I'm thinking that since we are at the lower side of this sideways trading range that if today we see a move up to the upper side of this range but don't breakthrough it (nor breakdown from the lower side) then both bulls and bears will still be wondering about the next directional move.  Meaning that it shouldn't get close enough to the March 1st all time high for the bulls to look to exit longs or for the bears to short the double top.  I'm throwing out the spike high to 2394.50 on April 26th and just calling "the range" about 2380 to 2390 as that spike high could have been our "double top test", which so far has held.  I've added a new falling green trendline connecting that recent high and it now makes a nice triangle when adding the horizontal black trendline.  No doubt this is a bullish pattern as the whole triangle is a bull flag with the April 17th low making the pole of the pattern.

But as we all know... triangle can go either direction, only bull flags have high odds of working.  If the triangle was right off a recent bottom and created the bull flag too, I'd put the odds as very high for the pattern to break up... but we are almost at all time highs again, not at a bottom.  So odds drop to 50/50 in my opinion and would really favor a breakdown more if the Fed's we're constantly manipulating the market all the time for the bulls.  It is what it is and we have to deal with it, so here's the ball Fed's... now run with it!  Say something really strong at the meeting or risk the triangle pattern breaking down on you... that's my thinking.  We all know how they use the news to spark at squeeze up on the bears, so they need to do that today or I think odds will increase heavy to the bear side.  But I'm a patient trader and will only short if we rally back up close to that falling green trendline, and preferably close green.

In other words, I want it to "appear" to be a "bullish" close.  I'd hesitate on shorting if we close down near the black horizontal trendline as that might suggest another run up tomorrow... which then leaves me guessing again on the true direction.  Anyway, it's going to be a nail biter today but I'll stick with those guidelines and look to short a green close up near the falling green trendline, and do scratch my head if we close near the black horizontal trendline.  Naturally a break of either will completely throw me off and I'll be force to rethink the whole plan again as SkyNet will have out smarted me... again!  LOL!

ES Morning Update May 2nd 2017

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ES Morning Update May 2nd 2017

Good morning everyone.  Looks like I haven't missed much the last few days since my Aunt Betsy passed away, with the funeral yesterday.  Hopefully that's the last of the deaths in my family as the old saying goes... "they run in three", and my dad last March, my mother last November and now my Aunt Betsy makes three.  Baring anymore deaths or UN-foreseen events I should be back to posting again on a regular schedule.

Ok, for today it's looking pretty much to me like a nice bull flag forming, so I'm glad I exited my shorts last Friday.  We have an FOMC meeting this Wednesday and we all know those meetings "usually" produce a  bullish outcome (about 80% of the time I'd guess).  My thoughts are that no matter what is said at the meeting we need a squeeze up to clear out the bears before any pullback can happen.  But, there's another scenario that could happen too... and that's a "basically" flat or nothing day on Wednesday.  Meaning it barely closes green or red but doesn't seem to react to the meetings' minutes.  If that happens then we could see the market rollover without hitting the double top or piercing it to make a new all time high.  It would be the tricky move where bears don't take any new positions and neither do bulls as they both are clueless to the next move so neither are in the market when it heads south.

Ideal scenario... up to no more then 2315 and down to 2300-2320 over then next few weeks.

But my ideal scenario would be a squeeze high from the bull flag (also looks like a cup and handle pattern on the daily chart) that makes a new all time just barely, but fails to hold it into the close.  It other words, I'm looking for the "bots" to run the stops out on the bears and then quickly head back down.  So we could have a sell setting up with either a squeeze to take out the bears (just not too high) or a sideways move that doesn't make a new all time high.  Odds favor the squeeze with the bull flag pattern but SkyNet is tricky so I'll just have to play it as I see it.

The only bullish scenario that would set up the market for another "much higher" move up (like 40-80 points above 2400) would be for today and Wednesday to close red I think.  A few more down days would likely be enough to reset the charts from overbought back to a point where they could start another good rally up.  How high is unknown but it should easily be much more then just a brief pierce through 2400.  It's a tough spot the market is in right now and the longer it trades sideways to make the bull flag stronger the more likely the move will be up again with a good rally.

But we all know that any news event can cause the market to start tumbling down, and while I'll play what the market gives me at this point I think we'll see 2300-2320 before we'll see that strong rally of 40-80 points over 2400.  I'm looking for a double top, slight pierce or failed double top to happen no later then one day after this weeks' FOMC meeting... meaning Thursday would be the last day for the bulls to rip it up into that strong rally I think.  Again, I'll play what I get but so far all I see is a quick squeeze up to the double top area to clear out the bears as most likely and then a rollover later in week.  And for today... more sideways action is likely as everyone awaits the FOMC meeting Wednesday at 2pm EST.

ES Morning Update April 28th 2017

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ES Morning Update April 28th 2017

Hi everyone.  This Wednesday my Aunt Betsy (one of my mother's sister) died in the hospital around 8:30pm.  Everyone knew is was only a matter of time as she has been sick for a long time, spending 6 months in the hospital or nursing home recently and only being home for about 2 weeks before going back to the hospital early this week.  With my mother dying last November, father in March and now my Aunt Betsy... needless to say it's been a rough period for me.  I also lost my cat Desi last Friday as well.  He was eleven years old and died at the Vet's office just an hour after I left from visiting him.  So all I have left now is my Aunt Barb, who is the last sister of the 3 girls my Grandmother and Grandfather had.  She seems to be in good health and only 75 so hopefully she makes it another 5-10, or more years.  Betsy's funeral is this Monday so I won't be doing any update.  I should be back Tuesday, although I might not be in the chatroom all day as I have an appointment with a lawyer that day.

Anyway, no update about the market today.  I have a small short and will just hold it over the weekend.  I "think" well get really close to the prior March 1st high and then rollover, but that shouldn't happen until early next week.  I see sideways to slightly up for today.  But I'll add that if they spend another week of sideways chop it will then become bullish as it would be considered consolidation instead of the big boys unloading at the top.  That's all I have... good luck and have a good weekend.

ES Morning Update April 25th 2017

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ES Morning Update April 25th 2017

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The futures are doing a little more follow through this morning, which should end at some point today and rollover later in the day for a pullback as this move up should complete the strong wave up that started over the weekend.  Then a pullback to the falling red trendline, which should intercept with the rising blue trendline would be my best guess as to the downside target.  After that there should be another move up I think, and it should get close to the all time high of just under 2400... but I don't see that until maybe Thursday of this week.  Today should be up in the morning and down in the afternoon if all goes as planned.  Target for this mornings move up would be the rising long black trendline that's pointing to about 2384 at the close.

So I'd think somewhere around the 2380's area we should top out and start that pullback.  Since I expect it to bought as the "buy the dip" bulls pile in at whatever level they see as support the move down should be in the 10-20 point range, again with the ideal spot being the intercepting point of the falling red trendline and the rising blue trendline. But if those two trendlines of support fail then they will go all the way down to fill the gap at 2347, I just don't know the "when" part yet?  I don't think it's going to happen before Thursday but let's keep it in the back of our mind just in case those trendlines break.

On the bigger picture this whole move down from the March 1st high of just under 2400 to the March 27th low of 2318 appears to be a larger A wave down with many medium and smaller waves inside it.  Then the move up from the 2318 low appears to be a larger B wave up, again with many medium and smaller waves inside it.  This suggests a larger C wave down is coming at some point soon when this larger B up finished.  I think we are in the final part of that B up and should finish it by this Thursday.  What's next is the larger C down that should take us to at least 2300, but should be lower.  Currently we appear to be in a medium C up from the April 17th low, which you can breakdown into smaller waves too and I think we are ending the smaller wave 3 up inside that medium wave 3 up (in larger B up).  That suggests this pullback will only be a medium wave 4 down, leaving medium wave 5 up yet to come... which should complete the larger B up and setup the next big move down to 2300 or more.

Now I'm NOT an Elliottwave expert, so I just do my best on wave counts... therefore you have to forgive me for not labeling them correctly with the proper titles.  I look at the technical analysis picture first and try to figure out when the negative or positive divergence will setup on the various time frame charts and then go backwards to see if there is any wave count that makes sense.  If not, then I don't even mention it.  But if it does makes sense then I will speak about it as a "most likely count", which then helps with the future forecast.

So, since we have NO negative divergence yet and such a strong move up on Monday we have to conclude that it was either a C up or wave 3 up as they are the strongest waves.  The negative or positive divergences come on that wave 4 and 5 of some degree, which tops out or bottoms out the move for a reversal the other way.  That's why we should pullback after today's move up finishes for a wave 4 and then up for wave 5 to complete the pattern by Thursday.  It doesn't always work as SkyNet understands Elliottwave far better then me... and always does tricky moves to shake bears and bulls both out and make the patterns and wave counts confusing.  It's never easy but we traders just do our best and in the end just go with our gut.

ES Morning Update April 24th 2017

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ES Morning Update April 24th 2017

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Last Friday right before the market opened I was looking for a "pause" day where the market chopped sideways bouncing just under the green falling trendline and then a pullback down to the black rising trendline maybe afterhours or Monday, but it all happened shortly after the open as the market pulled back a little deeper then expected, down almost to the rising orange trendline.  But that was of course a bear trap as just when you think the bulls can't do it they surprise you with a big gap up like we are having this morning.  Many times this happens afterhours or over a weekend to keep the bears trapped and get through various resistance areas by gaping over them when volume is light, and this is another example of manipulation to do just that!  But, we expected this inverted head and shoulders pattern to play out so it wasn't too big of a surprise, just earlier then expected if anything as I was thinking we'd rally on Tuesday strongly... but we play the hand dealt us.

Ok, so what's next you ask?  A top seems likely today or tomorrow before a pullback, but don't expect another big drop as the bulls will likely make several attempts to bust through 2400 before walking it back down again.  There's some news related stuff out this week that could move the market,  Trump’s tax reform proposal on Wednesday and the Government running out of money on Friday and possibly shutting down because they haven't raised the debt ceiling.  Of course either could cause another drop in the market of decent size, but that assumes the Fed isn't going to stop it by "buying the dip" to prevent the fall.

Anyway, resistance on the way up is the black rising trendline just overhead that's pointing to just under 2380, and then a double top just a hair under 2400.  Support is of course the pinkish/red falling trendline that it just gapped over this morning.  It's not likely going to pullback that low today as all the bears are trapped and I'd expect more of a sideways to slightly up day until the close for today.

Tomorrow is morning interesting to me as I'd love to see another "much weaker" push up at the open as then it might setup a nice short.  But I wouldn't rule out some kind of tricky move where we top today and pullback tomorrow morning at the open and then reverse back up to make a higher high then today.  I say that because this move up looks like a wave 3 inside a C wave up that started at the 2332 low back on 4/19, so a pullback tomorrow early would be a wave 4 down inside the C wave up, and then there would be one more higher wave 5 up to take out today's high and end the C wave up.

I'm not a Elliottwave expert but I do know the market moves in waves... it's just that predicting them weeks or months in advance is just to "iffy" for me, because if I can see it then so can SkyNet, and it will then therefore NOT happen.  So let's look for a pullback today or tomorrow morning for that wave 4 down, then another slightly higher high (then today's high) to make the 5th wave up and end this C wave.  At that point we can start looking for a short.

ES Morning Update April 21st 2017

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ES Morning Update April 21st 2017

We finally got our breakout to the upside yesterday, which I think will continue into next week as the futures make another run for that 2400 level. But today we should chop around some, call it a "pause" day. I don't see much more upside until we pullback a hair and reset the short term overbought charts. Then after that we should rally up again early next week with Monday or Tuesday being the most likely dates. It's unsure at this moment on how long it's going to take to reset the charts to allow another strong push up. This sideways "pause day" type action could extend into Monday or end today?

Ok, for today I'd expect to see the falling green trendline (pointing to about 2356) and the rising blue trendline (pointing to about 2357) to hold the bulls back. Ideally we chop all day and fall back into the lower rising trendline of the wedge (pointing to about 2349) before making another move up next week. You'll notice I expanded that wedge with the new trendline in orange (pointing to about 2341) as the original wedge broke-down on Wednesday. I don't think we'll fall back down to that new orange trendline today but if we chop all day up today, up near the blue and green trendlines then we "might" see it Monday morning.

Overall, I'm bullish for next week as I think they will make another run for 2400... not sure if they pierce it a little, fall short a little or double top it, but I think they are going to try to get it as high as possible before another good move down. Short term though, as in today, I think we'll do a lot of nothing but "holding the line" where we are currently.

The common plan that the bulls do a lot is to chop sideways long enough for a rising trendline to come up closer so the pullback is small before another run higher. That suggests they will go sideways for as long as possible until that old black rising trendline (that makes the original lower trendline on the rising wedge) comes up to a higher level. Currently it's pointing to 2348 or so but by Monday it should just about hit the falling green trendline. There's usually a breakout when the market trades sideways into a mix of crossing trendlines, so a slightly red close today might just set up another move up Monday. We'll see as time passes but I'm thinking that's what the bulls have planned. As always, I'll post new thoughts and charts in the chatroom throughout the day.

ES Morning Update April 20th 2017

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ES Morning Update April 20th 2017

Up, down, up, down, up, down... kinda makes me dizzy!  It's funny how the market can go straight up for days on end but can't go straight down in the same manner.  If the Fed's didn't constantly manipulate it by never letting it drop too far, too fast this market would be half the value it is now.  It makes it very hard to trade as patterns, technical analysis, etc... don't work as well on the downside as they do on the upside.  For example, the inverted head and shoulders pattern that should have produced a strong rally failed, and that normally would produce a flush out to the downside that would take out previous lows... like the 3/27 and 4/17 low.  But it gets manipulated with and prevented from happening.  It like this is a football game and the bulls are one team and the bears the other.  The bulls had a perfect setup with the IH&S patterns and fumbled the ball to the bears.  The bears should have be able to run the ball deep down the field but the crooked referees called holding or something against the bears and only gave them 10 or 20 yards instead of a touchdown.

Anyway, what I see for today is the bulls with the ball again trying to get a C wave up going with some tired players... meaning "close to rolling over" MACD's.  Pattern-wise it looks like an MA pattern, and that's a bearish one that suggest a drop that should easily take out the 3/27 low of 2318 or so.  The weekly and daily charts are clearly still putting a lot of downward pressure on the market, which is why the 60 minute chart can't seem to get much momentum going to the upside.  A "flush out" move down is much needed to get the longs out of the market and enough bears short to squeeze back up for a nice rally.  But so far all we are getting is chop up and down day after day.

On the big picture these last several months of range-bound trading is bullish and suggest another higher high (over 2400) will come at some point this year.  But the short term is bearish and just is waiting on both the futures and cash indexes to align up all the short term time frames together in overbought territory and then a flush out move down can shake out all the bulls, get the bears fully short and then you'll see a bottom.  And when it drops I think it will fool a lot of people expecting certain levels to hold as it goes through them to the next support.  My thoughts are that the falling blue trendline (pointing to 2275 currently) or the falling black trendline (pointing to under 2255 currently) will be our ultimate low before a strong rally up to new all time highs happen this spring/summer.  But that might take awhile, so let's focus on today and tomorrow.

What I think could happen here is that we rollover later today or tomorrow and have a retest of the 4/13 low around 2325 and possibly the 3/27 low of 2318 where we'll flush out most bulls and then have a nice strong rally back up.  But, the rally up should not be the one that takes us to new all time highs, and I mean like 2500 or 2600 on the SPX... not a slightly higher high, which is possible but unknown at this point.  A lower high is more likely as I still think we'll break the 2300 level on the downside before we break the 2400 level on the upside.  Anyway, this move down should end the choppy crap and give us a strong move up.  So if it happens today then I'd look for a long.  If we close green today then I'd expect the flush out to happen Friday morning and then a rip back up later that day to start the rally up.

ES Morning Update April 19th 2017

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ES Morning Update April 19th 2017

Overnight the futures broke-through the falling trendline of resistance and now appear to be in a C wave up.  And this is the extension move from the Inverted Head And Shoulders pattern that formed as I thought it might.  At this point I have to think a squeeze on the bears should be starting today with a move up to the red falling trendline over the next few days... meaning we could see it hit by Friday if this squeeze gets going like it should.

Many times we think it's impossible for the bulls to rally against such bearish looking charts, but you have to remember that shorts must cover their position when it starts going against them and that creates buying.  Over in China we've seen them outlaw shorting and that's exactly when the market fell much, much deeper.  Without the shorts in this market it would probably be half the current value it is now.  The shorts keep the market from collapsing as they have to buy it back at a loss when it starts to go against them.  So all the Fed's have to do is push the market up to a level that triggers the short covering.  Currently, that just a few points over the current 2345 area.  So if they push it 3-5 more points higher we should see a squeeze happen today.  Of course if it fails to happen then we could (should) see the charts get overbought enough by the close today to setup another nasty move down.

On the short term today looks bullish, but the weekly chart is still very bearish and the daily chart doesn't look good either.  The 6 hour chart is still pushing up on its' MACD's and this 60 minute chart shows a positive looking MACD but I'll flip to being very bearish if this squeeze doesn't gain momentum today.  With weekly and daily charts bearish to me it just makes more sense to wait to see if this breakout squeeze happens or not before jumping on the bull bus.  This is exactly the kind of setup that could fail from the bearish weekly and daily charts putting downward pressure on the market.  Normally this C wave up should scream but I'm just not so sure yet.  I'm on the sidelines on chasing this bull until it proves itself as after this C wave ends there's nothing left for the bulls to get excited about as they will turn the ball over the bears so they can run it back down for another ABC pattern (or 5 wave pattern?).  I'd say be "small" on any longs today as they might not be able to push it up as much as usual (which "if" usual, I'd expect to see 2360-2365).

What happens if China stumbles? A $140 billion doomsday scenario

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What happens if China stumbles? A $140 billion doomsday scenario

Australia is more exposed to the economy of a single nation - China - than at any time since the 1950s, when Britain was our major trading partner.

While the gains from that economic relationship have been huge, the risk if China's economy slows are potentially just as large, new modelling warns.

The analysis, from Deloitte Access Economics' Chris Richardson, to be released at the National Press Club on Wednesday, says that if economic growth in China halved from its current rate of about 6.7 per cent to 3 per cent, Australia would be forced into recession as the nation "just doesn't have the ammo to fight it off any more".

The damage would include:

What would it mean for Australia if China's economy slowed?

  • $140 billion wiped from national earnings for families, businesses and government in the two years to 2019.
  • 500,000 people would lose their jobs.
  • house prices would fall by about 9 per cent.
  • the sharemarket would drop in value by 17 per cent.
  • the Australian dollar would drop 15¢ and inflation would rise.
  • business sales and profits would drop by 8 per cent and 19 per cent respectively.
  • $40 billion would be wiped off the federal budget bottom line in 2019-20 alone.

Mr Richardson, in his speech to the Press Club, is quick to add that Deloitte Access is not forecasting a China crisis - although he does warn that China is too reliant on debt, has built too much, has over-capacity in everything from steel to housing and its economy is still reliant on stimulus.

"In fact, China looks stronger today than at any time since 2011. So this isn't our view of what is most likely. But it is entirely plausible," he will state.

In addition, compared with the global financial crisis in 2008-09, Australia's interest rates and dollar are already low, while the federal budget is in the red and household borrowing has risen. All of these factors make it harder for Australia to resist falling into recession.

Construction workers rest near a board with an artist's impression of the Central Business District outside a ...

The so-called "China stumbles" scenario is one of three that have been modelled by Deloitte Access Economics using its new "Horizon" economic model. All three are alternatives to the Treasury's "most likely" scenario for the economy.

The other two options to be set out by Mr Richardson present far rosier possible futures for Australia.

Shoppers in Beijing, China.

The "best and brightest" future would see Australia successfully ride the wave of a rising Asian middle class, with an economy 2.5 per cent larger than it otherwise would have been, an additional $800 billion of national income over two decades and stronger wages growth.

Crucially, it would also see Canberra embrace economic reforms.

"That may be a tall order ... politicians are struggling to get the message across that reforms bring benefits," Mr Richardson will note.

The third scenario, examining the so-called "cyber smart" option, would see Australia take a leaf out of Israel's book and embrace technology to drive growth.

"Going cyber smart would have some pretty big benefits for the average Australian," Mr Richardson will note, with 60,000 extra people in jobs, higher wages and a rise in Australian living standards.

How Americans Spend Their Earnings.

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How Americans Spend Their Earnings.

People who want to invest in the stock market say they are very interested to start trading. Problem is they don’t have the money to invest in the stock market. Too often, after receiving their pay and settling their bills, there is hardly anything left for savings and investment. This can be addressed, but first, let’s take a look at how Americans spend their earnings.

It is interesting to note that comfort and image eat up a lot of an American’s paycheck. On the average, transportation, food, entertainment and apparel cost more than what an average person spends for everything else. Rent or mortgage is also high up in the list of expenses. For example, if the average pay is $69,000, the cash allotted for housing is almost $18,500 per year. The only reassuring thought about this is that homes are an investment. After paying the mortgage for so many number of years, the property ends up as yours and you can choose to sell it or rent it out and make it as a source of income.

The problem with paying mortgage, a car as well as clothes and shoes to look good at the office every day is that savings and health often take a back seat. If there’s nowhere else to cut, then food is also sacrificed little by little. This forces consumers to try to look for alternative means of income, or to take second and even third jobs in order to meet their target income.

We’ve prepared an infographic showing how the average U.S. consumer spends their paycheck. If you want to be in control of your finances and start investing and earning from stock trading, take a look at how you can improve on these different areas of spending.

How The Average U.S. Consumer Spends Their Paycheck

ES Morning Update April 18th 2017

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ES Morning Update April 18th 2017

Looks like we are getting the right shoulder this morning, that I spoke about as "possible" in the chatroom yesterday.  It appears to have "almost" back-tested the shorter falling trendline with a low of 2334.50 right after the 3 am open.  You can see from the MACD's that they got overbought on the rally up yesterday and are now back down to neutral, where it's common to see them turn back up.  When I look at the 6 hour chart (not shown) the MACD's on it hit a low of around -5 with the 2324 low yesterday morning and are now up to around -2.5 or so.

This tells me that this inverted head and shoulders pattern has a very good chance of playing out as the 6 hour chart is just half way back up from oversold and still has a lot of strength left to push itself to zero or some positive number, and that should push the futures up as well.  But this 60 minute chart hasn't turned back up from being overbought yesterday and now neutral.  My thoughts are that we'll drift down early in the day and at some point we'll see that MACD make a turn back up and the futures should rally up with it.

Today is "Turnaround Tuesday" and that's what I expect to happen at some point.  So I'll be looking for a higher low then yesterday to form but a lower low then this mornings' low.  Basically I'd like to see a move down to the 2330-2332 area before I'd be interested in a long.  Naturally we traders rarely get what we want but that's the ideal trade setup.  In the end I'll have to take what the market gives me, which could be a lot of sideways chop and a late day drop (or rally?).  Most important thing I see is that we need the MACD to bottom out in the zero area and make that turn back up.  Timing it perfect is the hard thing though as it might do it early today or late today... or even close down today and make the turn back up after-hours to give us a Wednesday rally.

I can only layout what I'm looking for and wait patiently until I see it happen.  Whether that's sometime today or tomorrow I can't predict.  And asking for the ideal entry around 2330-2332 is just that... asking!  We might have already seen the low this morning around 2334.50 and not get much more then a higher low on that price level at some point today.  But the inverted head and shoulders pattern is looking good for playing out, and should happen by Thursday or Friday at the latest I think.  Target on it is up to around 2360 or so... and if this doesn't happen until late this week we could see that red falling trendline drop to about 2360 to setup the perfect resistance point to stall out the rally.

ES Morning Update April 17th 2017

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ES Morning Update April 17th 2017

Welcome back to everyone after a long 3 day weekend. Today I'll keep this short and to the point.  I'm expecting a kinda "pause" day today with a small rally.  Then one more move down either late in the day toward the close or Tuesday morning.  A retest of the 2322 low is likely around the bottom for this whole move down from the March 1st high of around 2400.  So, while I'm exactly sure of the date, it should be today or Tuesday for a bottom.  Then I'd expect a rally up the rest of the week to at least test the falling red trendline around 2370 right now.  But it's more likely that this rally will last for several weeks to shake out both bulls and bears.  Anyway, I said I'll keep it short so I will.  I'm looking to go long either today on a dip lower or Tuesday morning.

ES Morning Update April 13th 2017

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ES Morning Update April 13th 2017

Still drifting lower but not enough for me to call think they flushed out all the bulls.  It's hard too get excited about going long until I see them truly put in a high volume day where they run all the stops on the bulls.  That means we really should break support from this triangle and take out the prior low around 2318 from 3/27, and then I'd start to become bullish.  Right now we are stuck in a trading range with a bearish structure overall.  But we know the Fed hate the bears and buy every dip to keep it from collapsing.

So it's hard to get bearish too as we do expect to see a flush move down but timing it to the exact day is very hard.  Counting waves is too subjective so while one could say we are in C wave down and inside it we appear to have finished the wave 1 down, wave 2 up and should be in the wave 3 down now.  But clearly that's not the case as if we were in a wave 3 down inside a larger wave C down we should see a 30-40 point move happen.  We barely see 10 points each day this week, so the manipulation here is strong.  We just chop up and down every day and don't make any clear sense as to the wave count or the direction.

I can only speculate that because the market is closed on Friday for a holiday that today will be a very light volume day as traders leave early for the weekend.  Normally that suggests that the market will float up on that light volume.  But there's not been much "normal" in this market for the past several years as the "bot's" seem to have changed all the old patterns because too many traders learned them.  So I can tell you that we should hold the current support from the rising trendline to make up the lower part of the triangle that we are in... but today might just be the day that the "bot's" decide to take the market down and flush out the longs.  It would be a good time to do it as with the light volume expected it makes it easier to control the desent down.  Anyway, I don't have much to add other then to say the obvious... if we hold support we should rally back up later in the day from light volume.  If it breaks then we could see a nasty move down while most traders have already left for the weekend.

ES Morning Update April 12th 2017

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ES Morning Update April 12th 2017

As told everyone in the chatroom yesterday I missed the morning update because I had to be at the hospital for my Aunt Betsy at 6:15am and didn't make it back in time before the market opened.  They did not end up doing surgery on her as putting the stents in her right leg was too risky.  She's got no blood flow to her leg and is in danger of losing the leg completely over time if something isn't done to restore blood.  But she's only 70 pounds in weight and is just too tiny for the doctor to feel safe about surgery.  She's my mother's sister and as you all know I lost my mother to a stroke last November and my dad before that in March.  It's been a rough year or so as everyone expected Betsy to not make it as long as she has because she spent about 6 months last year between the hospital and the nursing home.  Then no one saw my mother dying with a stroke as she was in pretty good health for 75 years old.

Anyway, sorry to get off subject but all the time you've seen me "not post" over the last year has been due to various family issues.  I rarely even trade anymore as I have more then enough money to take a long time off and not worry about trading to make a living.  But I still enjoy doing the morning post and chatting we people I've got to know over time.  However, for my own trading I've been too distracted with my other more important project I'm working on with several partners.  And that is the purchase of an OTC company.  I'll be a partner in it and I'm extremely excited about it's future.  It has a copper mine with a Billion Dollars of reserve in it and with the stock market expected to be in it's final 5th wave up the crash to follow in 2018/2019 should send all metals through the roof.  So I fully expect this to be my retirement as while I have more then enough money to live for a long time right now it's not enough to completely retire on.  This company will be though... and I fully expect to see in soar many multiples of times over the opening price after all the paperwork is complete.  But of course I'll keep following the stock market and doing the posts for as long as I enjoy them.  Just expect me to take some vacation time at some point... LOL!

Ok, back to the market.  I'm still expecting another move down but right now we seem pretty rangebound in a triangle, and with Friday being a holiday and the markets closed it's doubtful if we'll see any breakdown of the triangle.  In fact I'd expect some light volume float higher tomorrow... especially if we close down today.  Overall we are building positive divergence on the MACD's here going all the way back to the 21st, but there's NOT been any real "Flush Out" to the downside yet and that makes me leery of expecting any rally to new all time highs again.  Can we get up to the 2370 area where the two trendlines of resistance are currently meeting?  Sure, but I wouldn't expect to see it busted unless we get that lower low first.  This only applies for today and tomorrow, but if they continue this sideways chop into late next week then at that point the charts could be reset enough to bust up to new all time highs.  It's all about "time" as the longer we chop in this range the less bearish it becomes and more bullish.  The bears must attack soon or risk losing the overbought charts, because as time goes by the charts will become neutral and eventually they will be oversold.  Anyway, I don't see any good setup today but if we drift down to touch the rising trendline of support on the triangle (about 2335 now) then it's likely a good long for Thursday.

ES Morning Update April 10th 2017

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ES Morning Update April 10th 2017

Futures look weak again this morning after a being up over 5 points Sunday night.  Good Monday morning to you as winter seems about gone now with nice warm temperatures about everywhere it appears.  This week is the week prior to the monthly options expiration week, which (before the introduction of the weekly options) used too see a low put in on Thursday or Friday.  However that old pattern seems to be as accurate as flipping a coin now.  But we are still due another move down I believe and this is the week we should see it.  Whether it happens early in the week or on Thurs/Fri is unknown.  But I'm expecting some flushout move down to lure in enough bears for a nice big squeeze back up and wipeout all the "buy the dippers" bulls.

Ok, so what's the expected targets?  On the weak bear move down we might only see the 2330 area hit, which will clean out bulls long from the recent 2336 low, but 2300 would clean out many more bulls that got long at the 2317 low.  Many people see this entire move down from the all time high of 2400 being some kind of wave 4, which when finished will produce a wave 5 up that will take us to new higher highs again.  I can't disagree as that's entirely possible.  I think it will be determined by how deep this pullback is before it starts the rally back up.  If the two targets mentioned are broken then the next big support is in the 2280 area all the way down to 2250 or so.  There's tons of support there but that might be too deep to support a fifth wave higher and instead we might only see a lower high if that deeper low is reached.

All in all... we are still early in April and next week is usually bullish.  It's the month of May that traders fear as weak historically.  So there's still plenty of time for a new higher high just as long as this move down ends this week and doesn't fall too far.  So I wouldn't get too bearish overall as we are still in a "bigger picture" uptrend.  For today I'd look for a short again if we can see the futures rise up into the trendlines of resistance around 2366 to 2373.  By Tuesday those should be all touching around 2370 I think and if we see that level hit I'm a bear for the next 40 points lower.  If we drop instead then I'll look to become a bull, but cautiously at 2330 and more aggressively at 2300.

ES Morning Update April 7th 2017

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ES Morning Update April 7th 2017

Tough chart to figure out this morning.  The futures dropped overnight just under 20 points from the news of Trump attacking Syria but recovered it all before the jobs data came out.  It's a weak market for sure but "buy the dippers" keep it from tanking it seems.  I'm bearish here but I'm just not sure if they are going to let it drop because it's a Friday and they usually keep the market pretty muted on the last day of the week.  If we could get a rally up to the 2360 area I'd be interested in shorting it but if we continue down I'm on the sidelines as it won't be deep enough to flush out the bulls to where I'd feel safe going long, and it will be too deep to chase short with today being Friday.

So, where are we?  To me it looks (again) like a series of wave 1's down and wave 2's up that is setting up.  This can go on for awhile before some news event gets blamed for a nasty wave 3 down that should take us to 2320 area first and even lower later.  But right now the bulls are still fighting and buying every dip to keep this pig afloat.  Just picture in your mind a dam that's cracking and holes are popping out everywhere.  Then picture the Fed sending Janet Yellen around the wall with a bucket of wet cement and a pair of gloves as she patches the holes the best she can.  Last nights' hole was from Trump attacking Syria and this mornings' tiny hole was the job data.  But good ol' Janet is fast to plug them and stop the bleeding.

Anyway, as I said previously, baring a miracle rally I expect to see nothing setup today to give us a decent trade setup.  I'd short a rally up toward the 2360 area but other then that I wouldn't take any shorts or longs at current levels as I think we'll get trapped in the Friday manipulation where the market won't be allow to drop much.  Clearly the best short was the FOMC drop but that so rarely happens that it's tough to have seen it beforehand.  Alright, that's all I have for today.  Have a great weekend everyone.

ES Morning Update April 6th 2017

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ES Morning Update April 6th 2017

Yesterdays big reversal after the FOMC meeting wasn't expected by many as we all know that most Fed days close green.  I suggested a possible C wave up that could reach as high as 40 points over the 2260 area open, but I also pointed out that other stocks had recently had failed patterns... meaning don't get too bullish.  That was just a lucky call I guess as bulls hit resistance from the pink falling trendline and stopped their rally up about 15 points or so from the open.  Then, if there was going to be anymore of a squeeze higher the FOMC meeting was the catalyst to make it happen... but it failed, and failed big reversing back down over 30 points from the high that day.

So, what do we have going on today?  Well, my guess would be a pattern similar to the sell off on 3/21 that saw a 2-3 day bounce.  It took the futures back up from about 2332 to 2356 or so, then dropped again, rallied one more time and dropped again deeper from the 24th to the 27th.  I don't expect it to play out exactly like that as it rarely ever repeats any previous pattern perfectly.  But a small rally today should happen.  The yellow rising trendline that was support is now resistance on this move back up and as long as it holds the bulls back I think another drop will follow by Friday or Monday.  This rally up might end today and only last one day compared to the 2-3 days for the previous time.  But it's certainly setup a series of 1 down, 2 up wave patterns that will at some point end up with a wave 3 down inside a C down... and that one should last several days in a row and be double or more the drop yesterday and/or the drop on 3/21.

Anyway, let's see if today some kind of choppy rally gets going and look to the end of the day to short it should it get back up to that yellow rising trendline into the close today.  I don't know if the drop after this rally will be the start of that bigger wave down or just a pullback briefly before another run back up later on Friday but we'll cross that river when it gets here.  If it happens then I'd label the move up today as some small degree "A up", then the move down tomorrow around the open as the "B down" and finally the "C up" into the close on Friday.  The move up should not take out the rising yellow trendline but worst case if it does the final line in the sand for the bears would be the falling pink trendline.  Since SkyNet loves to trap both bulls and bears I would not be surprised if the bigger move down doesn't happen until next week.  So be prepared for today and tomorrow to be choppy to the upside with fake out down moves that don't break yesterday's low.

ES Morning Update April 5th 2017

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ES Morning Update April 5th 2017

I finally made it back... sheesh, what a week it's been!  The guys took two days to get my hardwood floor in and then I got sick with that flu bug going around and spent 3-4 days in bed.  But I finally got well enough to spend 2 days assembling my new "U-shaped" desk and re-hooking up all my computers.  It was a pain in the butt of course, but worth it in the end.

Anyway, it's going to take me a few days to get caught up again so bear with me (no pun intended... LOL!).  Looks like we have a nice triangle on the ES Futures and the SPX Cash that goes back to the all time high on March 1st.  I see an "Inverted Head and Shoulders" pattern with the head on March 27th.  It suggests about a 40 point up move from the current level.  Wave count we could also make an argument for the 3/27 low to the 4/3 high been some kind of A wave up, then the B down to the 2340 low that same day.  So we could be in some kind of C wave up, and that would support a possible 40 more points.

However, I wouldn't get too excited if you're a bull as there was a nice bull flag on Nvidia (NVDA) too and it failed big time.  This should take the semi-conductor index (SMH) down as it's a big part of it.  These are signs in my opinion that "failed bullish patterns" can (and should) start showing up on other stocks and ETF's too.  Meaning that the setups on the futures that appear bullish could easily fail and cause a nasty move down.  The MACD's on the 6 hour chart of the futures shows four lower highs going back to 2/15 or so, and this current move up shows it just barely above the zero line and ready to make five lower highs.

Of course we know how well "they" manipulate the big ETF's and Indexes so it's tough to get blindly assume the market will drop like certain stocks.  So, I'll give no opinion right now on the direction of the market.  But a nasty move down is very likely coming soon... whether that's after some short squeeze rally of 40 points or so, or a rollover from current levels is unknown?

How giant digital adverts could soon be in our cities

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How giant digital adverts could soon be in our cities

Passers-by on a London street were recently amazed to see a fleeting image of a pink tongue protruding from fruity plump lips, seemingly suspended in mid-air.

It was the famous logo for the Rolling Stones and was part of an experiment by tech start-up Lightvert.

Its technology can produce images that appear to be 200m (656ft) high, but which only exist in the eye of the viewer for a fraction of a second.

So could we be on the verge of seeing giant digital ads in our cities, similar to those featured in the seminal 1982 sci-fi film Blade Runner?

Lightvert certainly hopes so.

Its tech, called Echo, works by employing a narrow - no more than 200mm - strip of reflective material fixed to the side of a building. A high-power projector mounted below or above the strip beams light off the reflector directly into the viewer's eye.

The image appears momentarily, exploiting what's called the "persistence of vision" effect - the way sparklers seem to leave a trail of light when you wave them around quickly.

Still from Blade Runner film showing giant advert of Asian woman
Are we about to see giant digital ads as featured in the 1982 sci-fi classic Blade Runner?

"Echo technology is being well received by those who have seen it to date," says Daniel Siden, Lightvert's chief executive.

"Viewers are curious as to how it works and engage with it in a way you just don't see with traditional screen media."

He is hoping that landlords will grab the opportunity to turn their buildings into revenue-generating digital billboards that are huge, yet physically unobtrusive.

These are very early days for the firm, but Mr Siden believes outdoor advertising generally is overdue a leap forward in innovation.

Lightvert ad - artist impression
An artist's impression of a Lightvert ad for Nike hanging over Manhattan

But would you want a billboard to target adverts at you specifically?

That's what happened in Moscow recently. Drivers approaching a digital billboard were shown ads for Jaguar's new SUV (sports utility vehicle), but only if they were driving a different make of SUV.

A machine-learning camera recognized the vehicle's make and changed the ad to target those drivers.

The billboard image was adaptive, too, showing the Jaguar against a dark background if it was night-time, or maneuvering through snow if the weather was bad.

The ads were developed by Synaps Labs and founder Aleksey Utkin says there are plans to test similar ads in the US this summer.

But won't such ads be dangerously distracting?

A study on driver distraction by the Swedish National Road and Transport Research Institute found that digital billboards attracted the gaze of drivers for much longer than other signs.

Researchers found drivers often took their eyes off the road for more than two seconds - a threshold which other studies have found to be dangerous.

Some bricks-and-mortar retailers, such as video games specialist Game, are using augmented reality (AR) tech to bring their shop windows to life.

Overlaying moving digital images on to the real world, as seen through a smartphone camera, caught the public imagination after the release of Nintendo's Pokemon Go game.

"AR is no longer just a nice-to-see technology - it has a far more extensive commercial application for brands, where results can be tracked and measured," says Richard Corps, co-founder of Ads Reality.

Ad Reality’s tech used to display animated content in Game shop.
An augmented reality window displays animated content in a Game video shop

"We're seeing a much wider industry use of AR tech in different environments, such as in education as well as retail."

The uptake of AR in advertising is likely to increase due to the demands of a new generation of consumer, says Alex Fenton, a lecturer in digital business at Salford Business School.

"AR has lots of potential," he says. "The technology has been around for many years but had failed to capture the imagination of the mainstream.

"But with things like Pokemon Go, there's now an acceptance from young people in particular about AR and its benefits."

Pokemon Go has introduced young people to AR and its benefits
Pokemon Go has introduced many people to augmented reality and its benefits

A few years ago retailers were excited about the potential of pinging you specific offers and ads to your phone based on where you were in the store or High Street.

But "proximity marketing" as it's called, has so far failed to take off, mainly due to the high costs of installing and maintaining Bluetooth beacons used to locate shoppers precisely.

But Devicescape eschews Bluetooth and instead tracks smartphone users via the use of wi-fi hotspots.

"Our software establishes a person's presence in a particular location based on their proximity to the wi-fi network at that location," says Owen Geddes, the firm's vice president of market development.

"It could be anywhere, a supermarket, a concert hall, or a bus."

This has resulted in a 13% rise in customers clicking through to product websites, he maintains.

Once aware of a person's location, the system triggers the delivery of a targeted ad to that smartphone containing a link to a piece of online branded content.

Chris Daly, chief executive, The Chartered Institute of Marketing
Marketing expert Chris Daly says firms must be sensitive to concerns about data collection

"It could be a discount offer for use in the shop the person is visiting, or a piece of content such as a movie trailer," says Mr Geddes.

"Importantly, it is always relevant to the consumer because of their location."

But Chris Daly, chief executive of the Chartered Institute of Marketing (CIM), says customers are instinctively skeptical about how their data is used, and thinks the industry will need to tread carefully.

CIM research has shown that 92% of customers are wary about data collection and use.

"When using adtech, marketers must keep this in mind and ensure they do not overstep their reach when making use of consumer data," says Mr Daly.

Maybe sticking to giant ads in the sky would be less controversial.

ES Morning Update March 27th 2017

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ES Morning Update March 27th 2017

Good Morning everyone.  Looks like the futures sold off more over the weekend breaking down from the triangle pattern it was in.  Now we'll start looking for support at the falling black trendline pointing to 2305 currently.  For today though it's not likely to drop that much more.  The move down has been very controlled so I'd expect a bottom to be put in shortly after the open.  After that we could see a rally later in the day and into Tuesday, but I don't think this selling is over with.  The 2300 SPX (230 SPY) level seems very likely to be tested this week.  So any rally today and/or Tuesday will likely reverse and head back down later in the week.  It's looking too me like we'll see the 2300 level tested by this Thursday or Friday if the futures play out as I think they will.

Now, for resistance on the way up... the 2340-2345 zone where those two black trendlines intercept is the most obvious, and then the falling blue trendline around 2350 currently... but it should be in the 2340-2345 area too by Tuesday I'd guess.  What I think we might see is an "inverted head and shoulders" pattern setup that fails late this week.  The left shoulder would be the 2332 low on the 21st/22nd.  The head would be put in today either already at 2317 or some retest today that dips a little lower.  Then the rally up later today will probably put in some type of ABC pattern.  The A up might goes as high as 2340?  Then the B down should fool everyone into shorting it, but it might stop at 2320 to make the right shoulder.  Everyone will see it and go long as the next move up should be a C wave in that ABC pattern and the breakout for the inverted head and shoulders pattern.

If this happens it "should" be the trick SkyNet plays on the bulls as the pattern should fail and produce another drop that takes out the head and finds support around the 2300 area.  This is my preferred scenario but we all know that SkyNet doesn't give me what I want very often.  My 2nd scenario would be some kind of bottom again early today then some weak chop to make a small rally later but not coming close at all to the 2340-2345 resistance zone.  Instead it would just hang around the current price level and possibly grind up to as high as 2330, but not high enough to let the trapped bulls out.  Then we'd see the move down to 2300 or so by tomorrow if this second scenario plays out.  I favor scenario one as I see positive divergence now on the MACD's but I'll take whatever SkyNet throws at me (kinda don't have a choice... LOL).  Anyway, that's what I see possible for this week.

P.S.  If you don't see a new update tomorrow it's because I'm putting down new hardwood floor in my computer room and the computers aren't all hooked back up yet.  I'll be back online as soon as possible.

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