Princetontrader Futures Trading Education Daily Report March 27, 2017
The S&P futures remain in sell rallies mode and in the middle of a lower band ride. Bears did what they had to do on Friday by pushing price down to the lower band in the afternoon. This established control into the Sunday open. Overnight we have traded as far down as 2317.75. Expect rallies this week just as we had rallies last week. You can be long the rallies but understand that most likely those rallies are sells. The tape continues to be volatile so you need to respect risk. The weekly pivot is 2357.67 and that should be the most any rally should print this week if we are to remain in a bear dominated sell rallies tape. The key for the bears is to defend the rallies. The key for traders is to resist being too early short on the rallies. Take profits as they come and get risk out. Should be a fun week.
Friday's Post: "The S&P futures traded as high at 2356.75 on the back of healthcare legislation headlines before seeing resistance. The Bears pushed back with the help of the same headlines. There is a ton of headline risk in this market. As it stands the Bears must trade below 2236-38 to maintain the lower band ride. This remains very much a sell rallies market and it will remain sell rallies until Bulls can convert the daily midband (2366) on a closing basis. If Bears want to make a lower low today, then watch the 5 min midband and vwap. They will keep you on the correct side of price. Subscribers are short 47 area vs 50 stop. Take profits, lock in your day goal, and enjoy Friday before the day even begins. Have a great weekend all."
Thursday's Post: "The S&P futures spent the day inside the channel between the second and third standard deviation lower Bollinger Bands. The third Standard Deviation Band provided support at the 2232 area. It marked the low in the morning turn area. From that area, we rallied to 2345 and the lower band on the Daily chart. We spent time above the second standard deviation lower band during the overnight session. This puts price able to make a more definitive rally. While price trades below the daily midband we remain in sell rallies mode. If the price action this week is indicative of a character change in the market, then this rally will be sold as result in a lower low. If, as in November, bear fail to defend key areas then we would be set up for a rally above daily midband that would put us in buy dips mode once again. It’s all about how the bears react."
Wednesday's Post: "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."