Princetontrader Futures Trading Education Daily Report February 17, 2017
8:25am ET Webcast to follow.
The S&P Futures continue to be in Upper Bollinger Band ride mode for the moment. We are beginning to see some character shifts that may no spell the end of the rally but certainly the end of the band ride. We have discussed at length the relationship between tape control and the hourly midband. For the first time yesterday price spent more time below that area than above. If the dynamic is the classic shift of a level from support to resistance then look for some time above the hourly midband early in the regular session with the bulls being unable to hold the level and bears being able to push below the 2336.50 key area (Thursday’s low). The Bandwidth begins the day at 4.53 which is just above the 4.5 area we have discussed the last few days as a place to begin looking for a turn. The bulls will need to print new all-time highs today in order to maintain the band ride as Bulls find themselves for the first time in the last five sessions without the luxury of a Globex opening band touch. This means the pressure shifts from bears to bulls as far as performance. Expecting a very interesting day headed into next week.
Thursday's Post: "The S&P Futures continue to be in Upper Bollinger Band ride mode. The Bandwidth begins the day at 4.45 so there is room for a little more price expansion. Above 4.5 is typically where I start to look for a turn. Just as yesterday we remain in buy dips mode. Price traded as low as 2331.25 yesterday and once again attempted to convert the hourly midband. When the Bears failed for a second day to hold that hourly midband on the price test from underneath the bulls took full advantage and squeezed the bulls into another new all-time high. How price reacts to that level this morning continues to be my top tell as to whether we will be getting more of the same or a more complete day from the Bears. Bears must breach the 2331.25 level (Wednesday’s Low) in order to begin to put this upper band ride into doubt."
Wednesday's Post: "The S&P Futures continue to be in Upper Bollinger Band ride mode. The Bandwidth begins the day at 3.82 so there is room for more expansion. Above 4.5 is typically where I start to look for a turn. This means we remain in buy dips mode. I discussed yesterday that we would get a more pronounced dip versus the nonstop grind that we saw on Monday. We got that move to 2319.75 twice. Formed solid matching lows in the dip buy zone and the Bulls took advantage and took price back to a new all-time high. The midband on the hourly chart has been a decent guide for control of this tape. Bears tried to convert that level yesterday but couldn’t hold the key 2325 area as resistance once the bounce started. After 25 was lost new highs over 2329 were inevitable. We are currently testing the hourly midband (2334.43) after the move up to the current high of 2340. How price reacts to that level this morning is my top tell as to whether we will be getting more of the same or a more complete day from the Bears. Bears must breach the 2319.75 level (Tuesday’s low) in order to begin to put this upper band ride into doubt."
Tuesday's Post: "The S&P Futures continue to be in Upper Bollinger Band ride mode. The Bandwidth begins the day at 3.31 so there is room for more expansion. This means we remain in buy dips mode. The market provided only small fleeting dips yesterday but they we buys for those who were quick and decisive. As we head into Tuesday the advantage remains with the Bulls. We printed a new all-time high yesterday at 2319. The 2323/24 area has held as support and the hourly mid band didn’t convert to resistance in the overnight. Daily pivot provided level support at 2323. If the Bears are going to make any headway to the downside bother the hourly midband and the daily pivot will need to convert. That would set up a down move to fill the cash gap the 2316 SPX. You have to assume that move would be a dip to buy. I’m expecting more of a pronounced morning dip today. That should be viewed as an opportunity to get long . If bears press lower than the ultimate test would be at weekly pivot/last week’s lows (2303)."
Monday's Post: "The S&P Futures followed through to the upside on Friday. Very typical action following a range breakout to all-time highs the prior day. Bulls push up into the 2315 area and have made a new all-time high of 2318 during the Sunday overnight session. The push to 2318 was enough to engage the upper Bollinger band on the daily chart and preserve the current upper band ride. The Bollinger Bandwidth indicator continues to rise (indicating band expansion) but at 2.78 this morning there is plenty of room for further expansion. Every morning I show an hourly chart. That chart is particularly telling this morning as you look at the middle band on that chart. Price has held the middle band on the chart since price moved above it following the final weekly pivot rejection on February 8th. As long as hits of middle band are bought the bulls remains in control. We have a new weekly pivot (2303.33) and any test of that area in the next 1-2 sessions will be critical. Each side will want to establish weekly pivot as their ally. Should Bulls continue higher expect all dips, especially regular session morning dips to be buys. Bears need to convert weekly pivot to resistance and work their way back to the daily midband (20 day sma). That move would take quite a push. Until then the bulls remain in control."