Always consider hidden risks
COT ( Commitment of Traders )
As we can observe on the graph below, Small speculators started adding to their long position of the SP500 since mi-July
( blue line ) and Large Speculators decreasing their short positions ( green line )
And as we can see on the graph below, the Seasonals are turning bearish for the SP500 til the third week of May...
This is part of the The SP500 Package: Want to learn more: click HERE
Yesterday I wrote: To change that bullish phase for today, we will need a
daily close below
2002.5, unless the bullish phase will continue.
We did closed at 1998.75; so the tiny correction phase have begun...
Also last on September 3rd, we did closed below the resistance trendline
(then at 2000.5) that started on July 3 ( see amber line - charts below ) -
now at 2001 ( then becomes resistance ).
But the most interesting factor, technically speaking, is that we had
on September 3rd a Shooting Star Candle Pattern on SP500 Futures.
( See first chart below - ellipse ).
We are not anymore into a steep uptrend channel that started on August 28 ( overlap ) but still into a second one with 1991 support and 2008 as resistance for today.
Market is still in that major grind since August 8 but in the process of reversal.
Bulls will notice the cross between the 20 and 50 DMA ( Day Moving Average ) on September 2 and will give them even more conviction into that market.
To change that tiny correction phase for today, we will need a daily close above 2008 ( then back to a bullish mode ).
Expect Volatility to increase into the next few sessions.
We have to take into account that seasonals are for a range pattern til September 5 before resuming another bull wave.
Then today I expect a range from 1991 to 2001.
My Focus will still be on the Financials and the VIX.
Three factors brang my attention:
1) Seasonals: SP500 Seasonality Trend : Range Trading Pattern ?
2) That Tech Indicator is Scary: NASDAQ McClellan Indicator and SP500: Overbought Zone ?
3) Market Full Speed Ahead: High Beta / Low Beta ETFs : Still Risk On ?
Back to the technical levels now.
We are in a tiny correction mode ( since September 3rd ).
We are not anymore into an uptrend channel that started on August 28 with
2007 as support and 2018.5 as resistance. We have also a second channel that started on August 26 with 1991 support and 2008 as resistance for today.Also, we have to take into account a support
trendline that started on July 3 at 2001 ( Amber Line - Charts below ).
We need to stay below 2008 for that scenario to unfold. That 2008 level will make all the difference IF broken or not. A test and breaking out that level will cancel the tiny correction mode and will be seen as technical strenght.
IF 2002.5 break down on a daily close ( it did on September 3 rd ) , then expect a tiny correction ; then 1987.5 MAX 1981.5 for now.
IF 2008 break up on a daily close then back to a bullish mode; then 2018 MAX 2022 as targets for now.
Adding the 50 DMA at 1962.5 is clearly indicating the levels not to break for bulls.
Already starting to trade below the 1962.5 level will mean to me technical weakness and Bears are starting to take control of the market.
Another Factor to keep in Mind is that seasonals are for a range pattern til September 5 before resuming into another bull wave. See 5th chart below.
The market should trade today between 1991 and 2001.
Expect volatility picking up.
And Small Speculators started to cut to their long positions last week as shown by the chart below....
SP500 E-Mini Futures Daily U4 - My Shooting Star ?
- PREMIUM USERS
September 4 ( From Barchart, David Stendahl,
SP500 E-Mini Futures Daily U4 - My Shooting Star ? $SPY, $SPX, $ES_F #Trading #Emini #Futures #ES_F #SP500