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Kah Plowy! Stock Market Trading Setup for Tuesday, February 11, 2020

Kah PLOWY! That’s what they used to say in the funnies when I was a kid. Many of you reading this have no clue what the funnies were. But that’s ok! Because the charts know all and tell all, just like my old Ouija board. Or was that my Magic 8 Ball?

Oh what the hell. Charts are cooler.

Liquidity moves markets!

Follow the money. Find the profits! 

Yesterday, I recognized from the S&P futures hourly chart that “if this sucker peeks out above 3329, it’s gonna blow. As in sky high. 20 hour momentum is in a very bullish pattern… potentially.”

And so it was my friends. It really blew because I had recommended a put purchase in Liquidity Trader. But only to buy at 10:30 AM if the market opened strong. Which it did. So now we wait and see, but with a tight stop.

Meanwhile, here’s the hourly at 7:20 AM in Noo Yawk. Yesterday we had a bullish setup. Today, we’re on the brink of something. God knows what. But we don’t need to know. The market will tell us, soon enough. Personally, I like the odds of a rollover. We need some bull death and destruction. Bears are already extinct.

ES Futures Hourly Chart

Meanwhile over in China, the comeback kid has slowed a bit.

The Shag High Composite is now at 2901. I said on Friday that it looked headed for the broken uptrend line at 2925. “That would be a perfectly normal rebound from a technical perspective. Then we’ll see. A rollover from there could lead to a test of the low or worse.”

China Stock Chart

Meanwhile, back at home in the US the S&P fucutures (ES) have vaulted above the trend mean where I had expected them to sit for a bit. C’est la vie, c’est la guerre of trading. Now in the upper half of the channel, the ES has drawn a bead on 3400.

In defense of my stupidity, I did take both sides yesterday. “Looks like there’s a trade on the long side if they clear 3333, and short below 3300. Potential upside is 3400. Downside, 3340-50.” Pattern recognition in trading is like reading old Chinese restaurant menus.  If they don’t serve what’s in Column A, take what’s in Column B.

Please. Don’t ask where these analogies come from. It’s embarrasing, I know. But I have no sense of pride.

S&P Futures Chart

Below is the S&P index (cash) hourly chart. That little green oval at the far right is where the futures have been trading this morning. It looks like they’re gonna take the cash index right up to resistance around 3362.

Yesterday, we recognized that “the 5 day cycle oscillator has been falling since last Wednesday. That cycle is primed for a low today. We should get a bounce…” Yepper. Sure did.

I wrote over at Capitalstool after the close, “Minimum 3 day cycle projection at the close. 3362.” Oop! There it is! 

S&P 500 Hourly Chart

But I also wrote that the 5 day cycle was young. At the close yesterday there was not yet a cycle projection, and it looked to be headed much higher.

Maybe not. That’s quite a trendline cluster between 3362 and 3369. The rally at least should take a breather. I’m probably wrong, but that’s what I think.

For the big picture on weekly and monthly swings, and the long term, plus my tactical recommendations, see the weekly Technical Trader report. Try it risk free for 90 days! 

Meanwhile, here’s my latest on the Fed balance sheet, or Fed BS for short.

Not QE? The Financial Times Is Either Stupid or Lying

The pause in the growth of the Fed’s balance sheet over the past 6 weeks isn’t what the pundits are telling you. Some are saying that it’s evidence that the Fed is not doing QE. They’re either gaslighting, or clueless. But we know what it is, and we know what happens now.

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Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish, and was lead analyst for Sure Money Investor, of blessed memory. I developed David Stockman's Contra Corner for Mr. Stockman. I’ve had a wide variety of finance related jobs since 1972, including a stint on Wall Street in both sales, analytical, and trading capacities. Prior to starting the Wall Street Examiner I was a commercial real estate appraiser in Florida for 15 years. I was considered an expert in the analysis of failed properties that ended up in the hands of bank REO divisions, the FDIC, and the RTC. Remember those guys? I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. I'm not some Ivory Tower academic, Wall Street guy. My perspective comes from having my boots on the ground and in the trenches, as a real estate broker, mortgage broker, trader, account rep, and analyst. I've watched most of the games these Wall Street wiseguys play from right up close. I know the drill from my 55 years of paying attention. And I'm happy to share that experience with you, right here. 

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