Princetontrader Futures Trading Education Daily Report February 28, 2017
8:23am ET Webcast to follow.
The S&P Futures made yet another new all-time high on Monday with three trips over the 2370 area. The current “high of the moment” is 2370.75. The key takeaway from yesterday’s regular session was that we got the test of weekly pivot that we were looking for and that again bulls won that battle. Bulls touched the weekly then spent the morning defending higher lows against that area. What followed is what we have seen so many times in the situation over the past 5-7 years. Bears capitulate and bulls are able to take price to a new high. We rinse and repeat and move on. The market gets habitual and early week tests of weekly pivot have been a cornerstone of good trading tape action. The fact that we tested the weekly pivot on Monday morning is indicative of a more volatile two-sided tape over the next month. Tapes that test weekly pivot early in the week to establish which side has tape control behave better from a trading standpoint. This is encouraging in the face of a tape that has provided less intraday opportunities than we have seen in some time.
Monday's Post: "The S&P Futures pulled back Friday into a fairly classic dip buy scenario and spent the majority of the day chopping around the 56-57 area before heading back to 2365 into the close. If we are to end up in the range trade/consolidation at highs that I’m looking for we should migrate back to the mid to low 2350s over the next 1-2 sessions. The new weekly pivot is in the 2359 area and would be a natural area to be tested early in the week per usual. Support at weekly pivot in an up trending market means more of the same regarding dip buying and grinding higher over the course of the market day. A conversion of the weekly pivot gives the bears some fuel to test the 9 day sma. Major support remains at 2349/50 and 2336/37. Bulls are watching the daily upper band run away from them. Their best hope is defending all dips and pushing back to the higher end of these ranges and patiently waiting for another leg up."
Friday's Post: "The S&P Futures had two different days yesterday. The morning belonged to the bears who took price down to the s2 support area and made matching lows at 2353. We discussed 2355 as a key support area in yesterday’s premarket content and once 2355 could not be sealed as resistance after the bounce the bulls were able to take price back to the 2365 area. Overnight we saw a failure at the daily pivot/hourly midband (2361) which took us to a lower low versus yesterday. If we continue to see lower low Bears will have an opportunity to close price below the 9 day sma for the first time since 2/2. Bulls need to defend 2349/50 and get back over 61. The secondary band ride has ridden off into the sunset. A range trade is on the table, especially with yesterday’s price action. If the low 50s hold and we head back to 64/65 we have likely found our range."
Thursday's Post: "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. However, Bulls were unable to follow through and engage the upper band during yesterday’s session. The Upper Band now resides at 2378 so the band ride dynamic is become less likely. I’m expecting some consolidation/range trading up here near the highs. If we get a nice 15-20 handle range that should make for some nice trading similar to late January. Bears need to push back and get price below 2355 to begin any discussion of a pullback."
Wednesday's Post: "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."