Princetontrader Futures Trading Education Daily Report March 10, 2017
The S&P Futures are in the process of rolling from the March contract into the June contract. People get mystified by “the roll.” Just understand that it is an administrative exercise more than anything these days. Spread traders are few and far between these days. The most impactful thing the roll does these days is screw with the charts for a day or two. On to the market… We discussed a daily midband test all week as the next strep after Bears were able to convert both the weekly pivot (2380/2376.75 June) and the 9 day sma (2373/2369.75 June) into resistance. We tested and tried to convert the daily midband on Thursday. The area was defended on the first test as we mentioned. We are now into the next area of the thesis. We are seeing one of two things with this bounce: a bear market type rally that the bears will defend and create another lower low or the beginning of an up move off of a higher low established at the daily midband. Either scenario is plausible. I have to give the bull scenario the advantage due to the current uptrend we find ourselves in on longer term timeframes. If the Bears can turn this around and break the Thursday low then it would open up a potential move to the lower band and have sell rallies as the baseline position for the short term. Should be an interesting couple sessions while this plays out.
Thursday's Post: "The S&P Futures remain is pullback mode from the week old 2401 high. The Bears have sealed the Weekly Pivot (2380) and the 9 day sma (2372) as resistance. The daily midband (2356) is open for a price test. Standing in the way are perfectly matching Globex lows of 2359.50. Bears top priority will be to break those lows. If the 2359.50 lows are allowed to stand all day that is the type of opportunity Bulls will use to establish reliable support and begin to push higher as we get into the end of the week. If the more typical ES scenario plays out we should see more rally selling similar to yesterday. The Bears have had weekly pivot on their side since the Sunday open. That coupled with the conversion of the 9 day from support into resistance places the advantage with the Bears for the day."
Wednesday's Post: "The S&P Futures continue to show increased volatility which has made for improved two-sided trading opportunities. The Bears held the 9 day sma and have now converted that level to resistance. This opens the daily mid-band for a test maybe not today but over the course of this week. The Bulls want to hold last night’s Globex low in the 2359 area. Bulls need to start taking back key areas like the 9 day in order to get weak shorts covering. The 2401 high is now almost a week old. As this high establishes itself we can begin to gain more confidence that a short term high is in and that the next battle will be fought at the midband."
Tuesday's Post: "The S&P Futures traded as low as 2367 on Monday as the Bears took advantage of the push down Sunday night. The dip buyers showed up during the morning turn and pushed price as high as 2377 area. Bears fought back and close below the 9 day sma on Globex for the first time since early February. That said, this places the Bears in the same situation they always find themselves in during an uptrend. The Bears must perform today. The Bears must follow through. The Bears don’t get to take a day off. Bears will want to spend the day below 2373 (9 day sma and current hourly midband)./ Bears have sealed the weekly pivot as resistance heading into the day. Now Bears must do the same with 2373 and break yesterday’s low of 2367. The Bulls want to defend 2367 and get back above 2373 and 2377. A close above the weekly pivot would give bulls the advantage for the rest of the week. Today is critical."
Monday's Post: "The S&P Futures are steadily making lower highs and lower lows since the March 1st high at 2401. The new weekly pivot at 2280.00 will be a critical bull/bear line for this week. If the Bears can seal the 2280 as resistance then the Bears should have an environment where they can convert the 9 day sma on a closing basis. The obstacle to the Bears getting any traction in this tape is their consistent inability to convert any area of real importance. The Weekly Pivots and 9 day sma would fit that criteria. Absent the Bears being able to hold a key area…all dips are buys."