Princetontrader Futures Trading Education Daily Report March 28, 2017
The S&P futures remain in sell rallies mode and we rallied yesterday. This rally doesn’t negate the downtrend on the daily chart. However, any rally must be defended by the Bears ideally at the 2351.67 weekly pivot and as a last resort at the daily middle Bollinger Band (20 day sma). A close above the 20 day sma would shift tape control to the bulls and put us back into buy dips mode. For now, its fine to be long rallies. The room was long for most of the rally yesterday. Just understand that you need to take profits as you find them and roll up stops to lock in gains. If you can’t bring yourself to get long, then you need to stand aside versus getting early short. Early shorts will have you bailing out when you should be getting into a short trade. Be patient and respect risk.
Monday's Post: "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."