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China to Nix Trade Deal? Bullish! – Daily Stock Market Setup – May 12, 2020

Rumor has it that China will say bye bye to the trade deal. Futures were down when that “news” hit the Twitter. Now they’re up.

Stock Market Trading Setup for Tuesday, May 12, 2020

S&P Futures Daily Chart 

Liquidity moves markets!

Follow the money. Find the profits! 

Yesterday’s post.

The ES futures were up 5 at 2928 at 8:30 AM in New York.That’s up 33 from where they were this time yesterday. Yes there’s been a lot of bouncing around. 

They have traded in a range of 2895 to 2936 overnight and this morning. As of this writing they were sitting right on the centerline of the latest uptrend channel. Talk about regression to the mean. You can see on the chart how they’ve been hanging around that line. 

Support levels are around 2880 and 2855-60. The bottom of the uptrend channel is at approximately 2830. That would need to be broken, at a minimum, for there to be a chance of a downtrend developing. 

ES Futures Chart

The daily oscillators tuned to an 8 week cycle are still bullish on balance.

Rate of Change continues moving sideways near the zero line. Upturns from around the zero line are normally very bullish. Likewise, downturns from this level are typically very bearish.

MACD tuned to the same cycle has been moving sideways above the level reached in the Q4-Q1 advance. This signifies that the market is in trending mode. This indicator stayed near this level for 3 months before the market topped out. I wouldn’t get bearish until this turns down and price breaks support.   

Again, this is for the perspective of one day only. The purpose of these reports is not to divine the longer term. If you want longer horizons, I cover that in the Technical Trader service at Lee Adler’s Liquidity Trader. 

Hourly ES S&P 500 Futures Chart

The hourly chart is a mess, with the price moves not coloring within the lines. At least, not within the trend channel lines. But the trading has been rangebound between the 2886 support level, and resistance now defined at 2938, and 2946.

It’s all noise all the time until they break out of that range.

There’s no 5 day cycle projection. A 3 day cycle projection looks like 2953. That would be a breakout. We’ll see. That would imply a move beyond that to test the April rally high of 2965.

ES Futures Hourly Chart

Momentum, True Strength, and MACD tuned to a 5 day cycle are bullish, on balance.

Reminder- I’m only talking patterns for a day here. This is not the big picture. If you want that story, you must subscribe. Risk free trial and all.

Join me on the message board today and I will update you there occasionally during the day. Feel free to join the “fun.”

Meanwhile, here are the latest reports from Lee Adler’s Liquidity Trader. 

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Subscribers, click here to download report.

Try Lee Adler’s Gold Trader risk free for 90 days!  


The COVID19 Bull Market

Stocks are selling off this morning but the trend still favors the bulls. Here are the parameters to watch that would confirm, or signal a change.

Technical Trader subscribers, click here to download the report.

Not a subscriber? Try Lee Adler’s Technical Trader risk free for 90 days!  


Try Lee Adler's Technical Trader risk free for 90 days! Follow the money. Find the profits!

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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