Princetontrader Futures Trading Education Daily Report January 18, 2017


7:02am ET  Webcast to follow.

The S&P Futures settled into a nice range trade yesterday between 2267.50 and 2257.00.  This range reflects the range that has prevailed over the last dozen or so sessions of compression on the daily chart.  The Weekly Pivot (2265.50) lays in between the edges of the zone but so far isn’t acting as support or resistance.  The daily midband (approx. 2260) was not able to be converted by the bears on a closing basis so price closed above once again as it has for twelve sessions.  The tasks for each side remain the same.  Bulls must sustain a trade over 2270 and make a new all-time high in order to initiate a upper band ride.  Bears want to convert 2257 and daily midband so they can make a run at the 2228 and 2195 area and a lower band ride.

Tuesday's Post: "Yesterday’s extended Globex session was as advertised.  Pretty non-existent.  The Bears broke below the weekly pivot at 2265.50 overnight and traded as low as the 2257/58 area.  That area was defended and we are now seeing a test of weekly pivot from underneath.  The Bulls want to take back weekly pivot and continue their weeks long quest to sustain a trade above 2270. The Bears want to establish that weekly pivot is resistance and make a run a last week’s low 2247/48.  Should neither side be successful then we will continue to compress in a decent sized range."

Friday's Post: "The S&P Futures continue to be in compression mode.  The ranges the last couple of days have been nice.  The tape is whippy but tradable.  The Bears made an attempt to break the bands to the downside yesterday morning with a move to 2248s.  Bulls defended the move and when the Bears couldn’t defend the daily mid band at 2258 and the weekly pivot at 2262.7 the full V move was inevitable.  Price moved back to 2267.50 at the close.  The Bulls continue to be unable to convert 2267.50.  Price resistance held through the entire Globex session.  Bulls must break above 2267.50 today and stay above and make a follow through run to new all-time highs.  The Bears are wounded enough to do so.  If Bulls cannot complete that move I expect a retracement to the bottom of the range.  That’s been the pattern of the week and absent a bullish move to the contrary it is the highest probability outcome going into the regular session."

Thursday's Post: "The S&P Futures continue to be in Bollinger Band Compression mode.  The bulls have been unable tom sustain any trade above the 2267-2270 area and have made no serious threat to take out the 2277 high.  On the other hand the Bears have been unable to sustain any trade below 2260 as they squandered two pushes into the 2255/56 area yesterday.  The result is a very whippy tape that over time fades back into the middle.  This is the waiting room before band expansion. Anticipating direction for expansion is a very dangerous game that I don't recommend traders play.  The number of handles associated with an expansion are more than enough and the length of time allows you to get involved with trying to guess the break.  For today the parameters are basically identical to earlier this week.  The bulls must convert 2267.50 and make a new all-time high and attempt to engage the upper band.  The Bears must convert weekly pivot and now the 2255 area as well.  The would include the daily middle band (20 day sma).  The side that does their job will be in a good place to take the next leg of the market.  Until then we wait, keep risk tight and size under control."