11:20pm ET Webcast to follow. The S&P Futures finished where the started the cash session yesterday. The key to the day was the test of the daily middle Bollinger Band (20 day sma). The Bulls held that area as resistance and the Bears failed to do what we asked of them yesterday (convert daily mid-band and weekly pivot ). The result was a sloppy rally back to the 2265 area. As we head into the jobs report my attention turns to the compression of the daily Bollinger Bands. The Bollinger Bandwidth is sub 1.50 as I type this. The will result in expansion. That expansion doesn't necessarily have to come today. However, a strong jobs report reaction could provide the fuel needed for the short term market leg. That leg could be up or down. The key in trading band expansion is patience and an understanding that when expansion does come it will give you an opportunity to get in the trade. The risk in anticipating the direction of the expansion is great. Guess wrong and you are the squeeze or the collapse. Don't be that person.
Thursday's Post: "The S&P Futures had another look at the 2267.50 range top from last month. That level is also the pre-FOMC price from the December meeting. Post FOMC-minutes price traded as high as 2267.50 before finding resistance once again and pulling back to the 2260 area. Bulls are running out of chances to convert 2267-2273 and make a leg higher. The Bears showed nothing yesterday with the LOD being made at the open and price never really looked back. Bears must convert both the Daily Middle Band (20 day sma) and the 2244.67 weekly pivot on a closing basis in order to be in a position for any kind of pullback."
Wednesday's Post: "The S&P Futures had a volatile first day of 2017 with some really nice price action. The Bulls were unable to hold the morning highs and bears took advantage pushing price below the 2244.67 weekly pivot. However, in typical bear fashion price failed to establish weekly pivot resistance and the squeeze was on into the close. Bulls have continued to push up in the overnight trading as high as 2257. Bears must continue to defend moves to the 2260 area and if given the opportunity to push below need to convert daily mid-band/weekly pivot. Failure to do so will leave the market in a buy dips position and Bulls will walk things higher the rest of the week."
Tuesday's Post: "The S&P Futures traded as low as 2228 on Friday. This created a lower price low that has the potential to open the door to a much lower retest. 2228 was defended and price has move up and thtrough the new weekly pivot at 2244.67. Weekly Pivot was the ideal resistance area for Bears on Monmday night but after an initial pause the Bulls took price over and through. Bulls will want to hold above weekly pivot all week long now. Bulls have to take out the 2273 all time high or will likely be left with a 2269-2273 that looks more and more like a ceiling with each failed attempt. Expect volatility to creep back into markets certainly by next week."
Friday's Post: "The S&P Futures Traded as low as 2239.50 yesterday but failed to close below the key 2243 support area which bears we in a position to convert and push for more downside. As a result we traded as high as 2252/53 during the overnight. The midband on the daily chart was tested and held for the moment. Bulls need to get back to the weekly pivot (2260.27) and Bears must finish what they started yesterday in the 2239 area. daily midband support/resistance will be the best tell to determine who has the intraday advantage. Happy New Year!!!"