Princetontrader Futures Trading Education Daily Report January 30, 2017
9:15am ET Webcast to follow.
The Bears showed up for work on Friday and protected the prior All-time high of 2299.50 while trading below the prior day low early in the day. I mentioned to subscribers early during Friday’s regular session that the breach of the Thursday low opened the door to further downside. We also discussed that the most likely destination for that down move would be the new weekly pivot (2280.00). Bears pushed down to 2281 Sunday night be so far have gone no further. How price reacts to the daily pivot today is the most important take away from the day. Bulls must defend and Bears must convert. A conversion of weekly pivot opens up a test of the midband on the daily chart (2268 area). Bulls will need to trade back to the all-time high today in order to preserve the upper band ride. Holding the weekly pivot for the entire globex session puts that possibility on the table. The move off the regular open will be key.
Friday's Post: "The Bulls continue to maintain their upper band ride on the daily chart. Their task is to keep putting pressure on shorts by engaging the upper band and making another new all time high. Bears need to get below yesterday’s low at 2289.50. If Bears can accomplish that then a push into Sunday/Monday that keep price below the upper band would end the ride. Bears must first continue to defend 2296.50 which was resistance during yesterday’s very narrow regular session. Until bears can break 2289.50 dips remain buys ultimately."
Thursday's Post: "The Bulls followed through on the move out of the compression range and have now places the daily chart into a upper Bollinger Band ride. The Bulls engaged the upper band and avoided the potential of a “headfake” day that sees us fall back into the range. The existence of an upper band ride puts us into buy dips mode. There is a decent amount of expansion coiled in these compressed bands. Band rides tend to go farther and longer than most traders give them credit for and fighting them can be a very painful experience. Absent news, the bears still get no serious longer term consideration until we close back below 2267.50."
Wednesday's Post: "The Bulls made their best case for a move upward out of the compression range yesterday. Bulls defended 2262 off of the open and move above 2267.50. The 2267.50 area finally converted to support after three weeks of providing range resistance. The result was a directional push high that resulted in converting both 2273 and creating a new all time high over 2277. These were the criteria we have been discussing for the last couple weeks as required for Bulls to win the range. The Bulls task today is to engage the upper band and avoid the potential of a “headfake” day that sees us fall back into the range. Bulls did not touch upper band yesterday (it was very close) so it is imperative to their case that they engage the Daily Upper Band today if they want to begin the potential upper band ride. There is a decent amount of expansion coiled in these compressed bands. If we do go on a band ride understand that they tend to go farther and longer than most traders give them credit for and fighting them can be a very painful experience. The bears get no consideration until we close back below 2267.50."
Tuesday's Post: "The S&P Futures tested s2 of the Daily pivot (2253.50) for the third time in January. For the third time that area held and price rejected higher back into our trading range. The bulls have no answer for a sustained trade above 2267.50. Bears have no answer for a sustained trade below 2260. The 2273 former all-time high has been reliable resistance and holding that area allowed price to slip back into the range. While we made no progress on longer term timeframes the range continues to provide some good opportunities. Each side wants to accomplish their goals. Bulls sustain a trade over 2273 and make a new all time high to initiate an upper band ride. Bears want to convert weekly pivot and daily midband (2260s) and test lower support areas. Compression continues on the daily chart. Resolution will come in time. Until then take advantage of what the market is giving you."