The daily chart for the S&P Futures (ES) looks impressive as hell, if you are a bull. For bears, it’s Wagnerian.
Oh, wait, just one thing. 3040 is the top of a flattish uptrend channel dating from April 22. And there’s a pronounced negative divergence in momentum. In itself, that’s meaningless. But there’s a smaller one that has developed since May 19. Maybe they’re trying to tell us something. Like, if the futures roll over below 3040, GTFO.
Liquidity moves markets!Follow the money. Find the profits!
Of course, if your’re short and this breaks out above 3040, then maybe you should consider GingTFO because the immediate target thereafter would be 3100.
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.
Here’s a 5 hour bar chart. Gorgeous. It looks bullish as hell, but there’s that negative momo divergence again.
On the hourly chart, the Hurst 5 day cycle projection is 3040. The high so far this morning was 3035. Close enough for government work. Trend resistance is around 3035, 3045 and 3050 currently, but all are rising sharply.
The indicators are bullish.
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.
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The chart pattern may look like a top but cycle projections suggest something big is in store.
Bullish indications mean that we must assume that the bulls remain in control until proven otherwise, regardless of the bearish liquidity forces (See latest Liquidity Trader report) over the next three weeks. A bull move in stocks would raise the specter of a selloff in the bond market to support a stock rally, because there won’t be enough cash around to support rallies in both. But that’s not our problem. We just need to be on the right side of the move, whatever it is.
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Back in December I had no idea that a pandemic was coming. I had no idea that COVID19 would cause Treasury supply to increase 10x. Nor did I know that the Fed would buy all of it at first, and then that it would experiment with cutting back until “who knows what.”
Let’s be clear about one thing. The Fed did not swing into action to rescue the US economy from depression. The Fed’s first order of business when the SHTF was to rescue the Primary Dealers. Which it definitely did.
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