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Brown Pants Syndrome Day

Stock Market Trading Setup for Thursday, March 5, 2020

Hourly ES S&P 500 Futures Chart

As of 7:15 AM ET, the S&P futures have edged below trend support, which is at 3066. The 3050 area is also a support level. If there’s no immediate recovery above the trendline and 3050 is broken, the first target would be around 2955.

Momentum and cycle indicators suggest, but do not guarantee, a break. We’ll wait for the verdict of the market. If they lose 3050, I think we’ll see brown pants syndrome take hold.

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Follow the money. Find the profits! 

If they hold, the range from 3085 is critical resistance. Bulls would need to clear that to be in control. Otherwise the bears have it.

ES Futures Hourly Chart

China Stock Market Overnight

China broke out of the short term downtrend last night. It’s now aiming for 3100 on the Shag High. It’s one thing to cross a thinned out range, and another thing to break out of it.

The levels to watch are 3100 and 3122. One of those should stop the rally. If they then stick around that level and consolidate, that market could roar higher. If they roll over from there, LOB.

But if China goes ballistic, Wall Street should too.

China Stock Market Chart

S&P Futures Daily Chart

The rally in the fucutures has so far been a perfect fiber nacho 50% retracement. It also flirted with breaking out of the sharp downtrend channel, and has pulled back overnight and this morning.

If China is any indcation, we’d have a breakout. But the US and China don’t correlate well. In fact, I don’t even know why I should bother reporting it. 😄 But for now, I’m curious. If I continue to write these updates daily, I’ll report the Shag High, when it’s interesting.

But back to the ES fucutures, clearing 3100 today would be a breakout from the channel. But if it did not extend from there, I’d give it another day to prove it wasn’t a breakout fakeout.

If 3090 proves impenetrable, look out for cow diarrhea.  We’d see 2980 fast. If that breaks, then back to 2850 we go.

S&P Futures Chart

S&P Cash Index Hourly Chart

The green rectangle at the far right is where the futures have been trading this morning. They are locked between 3 day trend support and multiple trend resistance.

Break 3040 and all hell will break loose. There’ s a support vacuum to roughly 2965.

On the other hand, the upside would be a much tougher slog above 3110, and particularly above 3130.

An hourly close below 3060 would suggest a 5 day cycle downturn. It could be a very bearish day or two if that happens.

S&P 500 Hourly Chart

“And that’s the way it is, Thursday, March 5, 2020.” 

From Zagreb, Croatia, good morning!  

Where have you gone Walter Cronkite? Our nation turns its lonely eyes to you.

Meanwhile, here are the latest reports from Liquidity Trader. Note that I called the Fed emergency rate cut last weekend. 

Real Time Federal Withholding Data Signals Shows US Econ On the Brink

Suddenly the trend of Federal Withholding tax collections is in critical condition.

Subscribers, click here to download the report.

Get this report and access to past reports.  Read Lee Adler’s Liquidity Trader risk free for 90 days!

 

Rate Crash of the Century

The patterns on the charts of T-bills and the 10 year note are unprecedented. Something terrible has happened in the market. The Fed will have to cut on Monday. Tuesday at the latest.

It has implications for stocks, too. Here’s what to expect next.

Subscribers, click here to download the report.

Read Lee Adler’s Liquidity Trader 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 LiquidityTrader.com, 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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