Princetontrader Futures Trading Education Daily Report February 19-20, 2017
8:05am ET Webcast to follow.
The S&P Futures finally ended their upper Bollinger Band ride on Friday. That said, the Bears have done nothing to assert themselves since and have allowed the Bulls to run up to a new all-time high of 2356.75 in the Globex session. Europe has been notorious for stealing key highs and lows over the past 5 years so I will be interested to see how the 2356.75 high holds up over the course of the week. There is no regular session today so the pivot and support tables are valid through Tuesday’s close. The Bears are in jeopardy of falling victim to what I have termed over the years a “secondary band ride.” A secondary band ride is when we have a band ride up or down and price take a short respite from engaging the band (one session, two at most) then reaching back for the band a reengages starting a second band ride. These band rides tend to be ferocious short squeezes or down flushes as top callers/bottom pickers load up and feel as though they are in the clear. They’re wrong and the exits are fast and furious driving price in the direction of the trend. We are at risk for that dynamic this week if the Bears fail to fight back. European high vs secondary band ride.
Friday's Post: "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)."