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Look Out! Intraday Charts Are On the Brink – Stock Market Trading Setup for Friday, February 7, 2020

The Hurst 5 day cycle projection was at 3375 at the close in New York yesterday. We got a breakout above the old high, and held. That narrow holding action continued through trading hours in Asia, and so far here in Europe this morning. But it is very much at an inflection point here at 11:30 AM (5:30 AM in New York).

Another point or two down and we’ll get a breakdown that will target 3300-05. But if they hold here, look out above.

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ES Futures Hourly Chart

Meanwhile China continued its gap fill action. The Shag High Composite has reached resistance at 2875. It looks headed 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, to catch up on how this nonsense started off this week, click here.

As long as China doesn’t break, the US should party on.

Meanwhile, back on Wall Street,  the S&P fucutures (ES) are holding on by the skin of their teeth as of 5:00 AM in Noo Yawk. Here’s the daily bar chart of the ES.

3333 holds the key. If it breaks, the trend centerline at 3320 would be likely support. If either of those levels holds, then the rally would resume and would target 3400+.

S&P 500 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. Again, it’s obviously an inflection point.

The 5 day cycle oscillator has been falling since Wednesday. You could call it a negative divergence or you could call it an internal correction. That’s the problem with negative divergences. They’re not always bearish. It depends on whether the trend breaks. After the fact indicators aren’t much help now, are they?

If it does break, look for initial support and a bounce from the 3333 area. The futures just broke, and are already trading below that.

S&P 500 Hourly Chart

That’s today’s take on the intraday stuff. 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, since you may not be familiar with what I do in my spare time (sarc alert), here’s Tuesday’s chart and comments on the Fed Feed to Primary Dealers.

Lots of parallel tracks. But hey, correlation doesn’t prove causation. Sure it doesn’t bwahaha. Typical economist bullshit. Sometimes correlation and a little common sense does demonstrate causality.

Fed Not QE

I update this chart with complete analysis 6-7 times monthly in real time over at Liquidity Trader. If you’ve never subscribed before, you can try the service risk free for 90 days.



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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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