Here at the Stool we focus on the intraday and very short term cyclical trading patterns. I confine my longer term analysis to the Technical Trader reports. But the stock market has built a formidable looking potential base pattern over the past two weeks, that could have implications for more than just the next couple of days.
Looking at the 24 hour ES S&P 500 fuguetures this morning just before 6 AM in New York, the numbers to watch are 3832, and then 3838. Clearing those should give the market enough thrust to zoom higher all the way to 3855-60. …
OK, I keed. That would be the first resistance level. If that’s cleared then there would probably be enough ooomph to get to the trend resistance convergence around 3925 or so, if not today, then Monday or Tuesday.
The conventional measured move target of a breakout of this still to be confirmed base would be around 4000-4010.
Now, that assumes a breakout. What if this rally dies right here, and doesn’t clear 3832? Well, then we’d look to the first sport level for a target for the first pullback. That would be around 3785 at the time New York opens for regular trading.
That would only be a start for the bears. If they don’t get through that, this potential base pattern gets to drag things out for a while longer as we wait for the panicked short covering to trigger that breakout.
Once that short covering is exhausted, bears get the ball again.
Follow how pre-determined and known liquidity flows drive stock and bond prices here . I will show you and tell you exactly how the major forces of macro liquidity move not just the bond market, but stocks as well. Liquidity analysis sets the context for technical analysis. It helps us to narrow the focus of our chart reading to the outcomes that are most likely, given the circumstances.
To better understand the big picture right now so that you can take the correct action when the time is right, check out the following:
- We Knew QT Would Be Devastating, But You Ain’t Seen Nothing Yet June 21, 2022
- Is There Life on Mars, or in the Precious Metals? June 22, 2022
- Swing Trade Screens – Tank Gawt We’re Not a Long-Only Entity, Poor Bastids June 20, 2022
- Watch Out For a V Bottom June 19, 2022
- Gold Stares Into the Abyss and Doesn’t Like What It Sees June 14, 2022
- Dealers Assume the Position, as 75 BPs Coming Wednesday June 13, 2022
- The US Economy, Including Jobs, Collapsed in May June 2, 2022
- Quantitative Tightening is Here, and the Effect Will Be Devastating June 1, 2022
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