Princetontrader Futures Trading Education Daily Report March 22, 2017
The S&P futures experienced the best bearish price action we have seen since election night. The day started with a push higher after repeated pre-market support at the weekly pivot followed by a false breakout that stalled at 2378.75. This stall turned into a hard break of weekly pivot which accelerated 20 handles before resting momentarily at the 2354 double bottom area. Another hard break of 2354 opened a hard leg down to the 2340 area. The Bears we able to engage the daily lower Bollinger Band. The close below the Bollinger Band has created a lower Bollinger Band ride. Typically, in these situations you will see the lower Bollinger Band act as resistance for the next 1-3 sessions. Bears have had a big day but the challenge now will be to hold the bear market rallies at bay and turn the tape into a sell rallies environment. The tape can remain sell rallies if we continue to close below the daily mid-band. The Bulls will need to try to fight back slowly. Any long trade is a counter-trend trade until Bulls can close above the lower Bollinger Band.
Tuesday's Post: "The S&P futures spent Monday gravitating back to the 2369-2373 zone. We traded as high as the daily pivot at 2376 but the bulls were unable to capitalize on the up move and we retraced below the 2369 support area and down to our proprietary lower level at 2365.50. At that point, the Bears had an excellent opportunity to convert not only the 2369 supports zone but the weekly pivot, nine day SMA in the daily mid-band and establish themselves as being potentially in control for the week. What happened instead is what has typically happened when the Bears get to keep moments…we rallied. The bulls took price back into the 2372 area. We closed inside the original 2369 to 2373 zone. In short, we resolved none of the issues that were pending heading into Monday's trade. The Bollinger bands on the daily chart remain compressed and we are setting up for directional move. The trading focus should be on taking good setups, respecting risk and not overtrading in this environment. The bulls need to convert 2376 and attempt to convert last week’s high of 2388.75. The Bears need to spend Tuesday below 2369, break the Monday low of 2365.50 and attempt to convert the prior floor at 2354 which is the area of the daily lower Bollinger band."
Monday's Post: "The S&P Futures moved up to the 2382 resistance area and formed what could potentially be a double top. The Bulls continue to defend support at their daily midband/9 day sma (2369/70). The new weekly pivot comes in at 2373.60 along with the pre-FOMC price of 2372. This setup up a key zone of price between 2369 and 2373. The ability of one side of the other to convert that price zone to their advantage sets them up and being able to control the tape for the week. Bear conversion would mean a conversion of weekly pivot, 9 day sma and daily midband. Bulls conversion would hold support and those levels. The targets for price after an advantage has been established would be the upper/lower Bollinger band."
Friday's Post: "The S&P Futures spent yesterday morning pulling back to the 2373 area. What could have been a trend down failed to materialize in the afternoon session. After a sloppy retest of the 2373 area the bulls we able to push price back toward the 2380 area. Overnight was flat to choppy. As we get ready to trade Friday there are two key concepts. The Bulls are technically in a band ride after two touches of some tight upper Bollinger bands. If the band ride materializes then the bulls will need to trade over 2390 today to maintain the band ride. Bears want to hold price under the daily pivot (2380.58) and get back to the 2372/73 area. 2372 is the pre-FOMC price so a break today is critical. Failure to do so makes yesterday’s weakness look like a retest of the FOMC breakout that holds. That’s how floors get made. We already have a floor at 2354. A floor at 2372/73 would open a move to a new all-timer high next week. If the bears can convert 72 their job is only half done. The daily midband is 2370 and the 9 day sma is 2371. Basically, think of 2370-2373 as a bull/bear price zone that each side must win to achieve their intermediate term objectives. Respect risk. Don’t overtrade."
Thursday's Post: "The S&P Futures were taken into control by the Bulls yesterday. This has been a pattern we have seen many times over the past few years. The Bears allowed a double bottom at 2354 then failed to convert weekly pivot, 9 day sma or the daily mid-band as resistance. A series of higher lows follows and we find ourselves less than 15 handles from the continuation all-time high at 2401. Over the past couple of years, the futures have liked to close out the contract at contract highs. If that happens again then we should continue to grind toward 2401 today. During yesterday Daly Wrap Up I discussed the 2380 area as being the key to the overnight trade. It was a risk marker again a long since 3pm ET and provided 2-3 very nice day maker trades. I hope everyone took advantage."