Princetontrader Futures Trading Education Daily Report February 22, 2017

MARKET VIEW

8:59am ET  Webcast to follow.

The S&P Futures placed a secondary band ride on the table after the Bulls ran price up off the open and then back to the new all-time high of 2365 at the close.  Bears have fought back against that area nicely since and must continue to do so in order to prevent what is a likely short squeeze to 2400 if Bulls can engage the upper band again today worth a trade to approximately 2370.  Bears need to keep the pressure and attempt to convert the weekly lows at 2349/50.  If Bears can manage that then solid support from last week awaits, along with the weekly pivot, at 2336/37.  This overnight dip must be assumed to be a buy until proven otherwise.  Those assumptions have kept you on the correct side of the trade much more often than not.  Volatility continues to be low.  We have gone 45 trading sessions without at 1% intraday move.  That’s a new record by 9 days.  We continue to live in interesting times.  This is why I tell subscribers that this is a difficult tape and a frustrating tape to trade.  It’s not you…it’s the tape.

Tuesday's Post: "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.  The 2356.75 high was intact through the holiday Globex session as well as the Monday overnight.  There was no regular session on Monday 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…that’s this weeks battle."

Monday's Post: "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."

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