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...
SAMPLE FROM AUGUST 27 2014 - WANT TO SUBSCRIBE - CLICK HERE
Not much have changed for me since yesterday. I expect the Bullish
Channel to be broken on the downside in the next few sessions and the
volatility picking up going near Labor Day.
We are still within a steep uptrend channel that started on August 12
with 1998.5 as support and 2022 as resistance for today.
That bullish channel is in jeopardy unless we do have a daily close above
the 1998.50 level today.
Also, to have another bullish impulse, we need to close above the
resistance trendline that started on July 3 ( see amber line - charts below )
at 1999 for today.
Market is quite complacent after that major grind we had since August 8.
Technical Indicators are at or near overbought conditions.
Retail Participants are in Full Speed and unaware of the turning point in volatility getting near Labor Day.
We have to take into account that seasonals are for a grinding pattern til August 29 before resuming downtrend.
Then today I expect a range from 1988 to 2003.
So for that new scenario to continue, we need today that we stay above the 1994.5 support level absolutely. Unless we will resume back to the bearish phase.
My Focus will still be on the Financials and the VIX.
Three factors brang my attention:
1) Seasonals: SP500 Seasonality Trend : Grinding Pattern ?
2) Market is Complacent: Ratio SP500 Financials over VIX : Complacent Market ?
3) Market Getting Into Overbought Condition: SP600 : Volume A/D: Near Overbought Zone ?
Back to the technical levels now.
We are in a bullish mode ( since August 8 ).
We are still within a steep uptrend channel that started on August 12 with
1998.5 as support and 2022 as resistance. Also, we have to take into account resistance
trendline that started on July 3 at 1999 ( Amber Line - Charts below ).
We need to stay above 1998.5 for that scenario to unfold. That 1998.5 level will make all the difference IF broken or not. A test and breaking down that level will cancel the bullish mode and will be seen as technical weakness.
IF 1998.5 break down on a daily close, then a correction begin; then 1981.5 MAX 1876 for now.
IF 1999 break up on a daily close then another bullish impulse; then 2008 MAX 2013.5 as targets.
Adding the 50 DMA at 1957.5 is clearly indicating the levels not to break for bulls.
Already starting to trade above the 1957.5 level will mean to me technical strenght and Bears are starting to take control of the market.
Another Factor to keep in Mind is that seasonals are for a grinding pattern til August 29 before resuming downtrend. See 5th chart below.
Starting to trade below and/or having a daily close below 1862 will bring us back towards another wave in the nasty bear case from a consolidation scenario and open the door to a quick 1744 max 1718...
The market should trade today between 1988 and 2003.
Expect volatility to be average but picking up getting near Labor Day.
And Small Speculators started to add to their long positions last week as shown by the chart below....
SPY Daily - Uptrend Channel Still Being Challenged ?
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August 27 ( From Barchart, David Stendahl,
SP500 Futures Daily U4 - The May Experiment ? $SPY, $SPX, $ES_F #Trading #Emini #Futures #ES_F #SP500