Futures Updates

3/21/14

Stocks have continued higher so far today, as the FOMC sell-off seems to have been yet another fake out move in equities. The S&P 500 and the Dow are both above their resistance levels, and the S&P has actually traded to new all-time highs (a move not yet matched by futures). As stated on March 4th and March 17th, 1900 looks to be a good target for ES_F longs…we’re only 28 points away now (about 2%). The break of the descending trend-line offers yet another buying opportunity here, if you’re not already in from lower. A stop below 1850, targeting 1900. The risk / reward here isn’t as great as it was lower, but it’s still about 1:1.

The Dow is also trading well today, and there is yet another good YM_F long opportunity here on the breakout. The 50% fib test and the bullish engulfing candle back on the 17th of this month suggests a move up toward 17k over the next 3 or 4 weeks. Obviously the all-time highs in the Dow will provide some serious resistance, and being aggressively bullish at all time highs can be a bit risk, so use some common sense when thinking about position size and profit taking, but right now I don’t see anything to suggest a strong bearish move in equities going forward.

Watch the daily close on the Dow, however. If we see a strong late day reversal, we could have a potentially dangerous situation. If that occurs, I’ll update it over the weekend.

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3/20/14

Janet Yellen scared stocks a bit yesterday as the FOMC continued to taper their asset purchases and seemed a little bit closer to raising rates in 2015. The Dow and the S&P 500 both moved lower after the release, but have since made up most of that lost ground after a strong Philly Fed report this morning.

S&P 500

S&P 500 Futures fell to a low of 1842 yesterday, before bouncing at the end of the day. That bounce has continued into today’s session, and the index is now trading at 1858.25, and is retesting that descending trend-line resistance pointed out yesterday. A break above 1863 could trigger additional strength, still targeting the 1900 area.

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Dow

The Dow dropped to 16,049, but is nearly 200 points off those lows now today. Dow futures held a 50% fib level perfectly back on Saint Patrick’s day, and put in (appropriately) a very strong green engulfing candle. These combination suggests new highs in store for the Dow, which has been the laggard as far as US indexes go. A break of the descending trend-line at 16230 or so would be a good start for bulls. Support comes in at 15950.

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Silver and Gold

Both shiny metals have broken down below their key support areas, and need some time to process the most recent move. 19.00 is a good buying area for Silver if the sell-off continues.

3/19/14

S&P 500

The S&P 500 continues to trade well here ahead of the FOMC meeting this afternoon, which is the major event risk for the week. S&P futures are up over 40 points since the reversal off the 50 day EMA, and are currently challenging light trend-line resistance. A push above 1870 or so would add conviction to my 1900 call from the week’s beginning. We’ll see what today’s data brings us.

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Dow

Dow futures are also testing a minor descending trend-line, after putting in a bullish engulfing candle on Monday. Support on Dow futures comes in at 16.1k, then 16k, while resistance stands at 16.3, then 16.5k, the previous all time highs. A break above that descending trend-line would be a bullish signal for those looking for the other indexes to confirm the S&P 500.

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Gold and Silver

Silver and Gold have remained under pressure today, dropping 0.6% and 1% respectively. Gold is testing its last ditch support range, from 1340 to 1330, while silver remains at the bottom of its range, still above its key support levels, which fall in at 20.50 or so. We’ll see if today’s FOMC decision can spur some positive moves in metals.

3/18/14

Quick update here on silver and gold, as both are down on the day. Silver has dropped 2.14% and Gold is lower by 1.2%. Both, however, are sitting at key support levels starting off today’s trade, and may be offering nice low risk low opportunities.

Silver 

Silver has been sold pretty hard today, but is not retesting some daily EMA support as well as a key horizontal level that dates back to July of last year. Longs from here offer a terrific risk / reward ratio, with a stop just below 20.60, targeting 21.79 first, and then as high as 24.00 if we see a breakout.

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Gold

Gold is also testing a key support level here this morning, but support here extends down to 1330 or so. Still, aggressive traders could start building some longs here, still looking for a move up toward 1425.

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3/17/14

Sorry for the long delay between updates, dealing with some non-finance things. Updates should (hopefully) be more consistent from here on out.

Silver 

I don’t talk about silver a lot, because it’s a crazy commodity and I don’t often trade it. It’s been behaving very well lately though, and so I thought I would include it today. Silver has been respecting the key daily EMAs very well, with the 200 acting as resistance and the 50 / 100 confluence acting as support. I’m bullish silver right now, long via calls, and comfortable adding to those longs around 20.70. Ideally, we’ll see a strong breakout above 21.80 (the 200 ema and TL resistance) and a strong rally up to around the 24 figure. Silver tends to track gold very closely, and right now silver is definitely lagging its pricier cousin. This lag encourages my long bias on silver.  The chart below has gold overlaid in purple.

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S&P 500

Ukrainian fears have driven the S&P lower since its 1887 highs. In retrospect, the daily doji after those new all-time highs were a good warning sign of downside to come. Futures are up over 18 points as I write this, having found support at the 50 day EMA. As you can see, the last time price held at the 50 day we eventually rallied to new highs, so I wouldn’t be looking to short the S&P here. If anything, I would look to get long with a stop below the lows, targeting a move to about 1900 or so. I bought some calls at the very end of last week, so I’m bullish via those. 1875 – 1887 will be the major resistance range for S&P 500 futures going forward, and if we see another sell-off, 1800 is the next major support area to watch (the 100 day EMA).

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The NASDAQ 

Similar to the S&P 500, the NASDAQ has found a bid at its 50 day EMA and is up 1.15% so far today. The 3740 all time highs stand as resistance, while the 3518-3550 range is key support. Only a convincing break below the 100 day EMA on NASDAQ would shake my bullish bias.

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Nikkei

The Nikkei is in a very interesting and potentially precarious position here. The Ukrainian sell-off drove Nikkei futures down out of the possible bear flag that I’ve been watching for quite some time now, signalling the possible start of another leg lower in Japanese equities. The Nikkei has joined the general risk-rally, with futures up 1.9% on the day, but major resistance starts at the 14.7k level and extends up to the 15.5k range. It is also worth noting that bears were able to gap the Nikkei down below its 200 day EMA, but were not capable of triggering a major sell-off. We’ll see if this somewhat bullish resilience continues into tonight’s Asian session.

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Gold

I remain extremely bullish on gold as the shiny yellow metal has continued to show good strength after clearing its 200 day EMA back in late February.  Dips down to 1350-1360 should be viewed as great buying opportunities, while a strong move up above 1400 to 1415 or so would likely see some profit taking. We’ve begun to see some bullish MA crosses, and I will continue to use options to get long on dips until further notice.

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3/4/14

Nikkei 

Nikkei futures are up by nearly 3% today as fears about the Ukraine ease. Futures respected the ascending trend-line that makes up the bottom of a bear pennant and have headed back up into daily EMA and trendline resistance. The 50 and 100 day EMAs now stand as resistance, along with yet another re-test of the descending trend-line dating back to June of last year. Shorts at these levels have a nice risk / reward ration, but cautious traders will wait for a break of 14.5k – the bottom of the bearish consolidation pattern.

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S&P 500

The S&P 500 broke above 1870 today, touching a high of 1872 and completely erasing yesterday’s losses. The index looks set to continue higher toward 1900, where projected resistance comes into play. 1830 stands as first support, and bulls are firmly in control above 1750.

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Gold

Gold is down about 1% today, but is well supported by the 200 day EMA at about 1325. Price tested that level earlier today and bounced off it slightly, and decisive close below that level is needed for a short term correction. The 50 day EMA is threatening to cross above the 100 day EMA for the first time in over a year as the gold rally starts to pick up pace. The next support range below 1325 is around 1285, while gold is trading at weekly resistance. We’re still anticipating a move up into the 1400-1450 range over the next few weeks.

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2/26/14

Nikkei

Quick update to my four hour Nikkei chart that I think better represents the resistance area the index is currently battling. After managing to break about the 200 period EMA on the four hour chart (and the 15k level) we’ve seen the Nikkei still remain relatively quiet. I’ve abandoned the longer term trend-line I’ve been watching as price now has managed to get back above that level, and I’m now focused on a well tested ascending trend-line that appears to mark the top of a bear flag formation. the major resistance level to watch is now 15.2k while first support comes in at 14.8k-15.0k. The index still looks bearish, but the bears are going to need to step in sooner rather than later.

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Gold

Gold is down 0.8% today and may be offering a nice opportunity to add some long exposure here for the continued move up toward 1400. Gold is testing ascending trend-line support and retesting the descending trend-line dating back to August of last year. As I’ve been saying, RSI studies were suggesting that we were likely to see a pullback sooner rather than later, and this may be the dip to buy. Support exists at 1320 and 1305, the first resistance level is 1345.5.  Gold is sitting at a major inflection point on the weekly chart, a strong finish to the week could be the start of a strong, long-term move higher.

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S&P 500 

S&P futures rallied to a new all time high yesterday but failed to sustain that momentum going into the close. After touching a high of 1858.71, the SPX fell back to close at 1847.61 – below the previous all time high. Overnight action hasn’t managed to regain those highs, as futures are actually trading slightly lower right now. The chart below is a daily chart of the actual index (not the futures) and it shows key resistance (in red) and support (in green) range that traders will be eyeing today and through the rest of the week. Play the levels, and don’t be afraid to hedge – markets are still in a very strange place here.

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The Nikkei 

The Nikkei managed to reclaim 15k last night, albeit only for a short while, again failing to sustain its move higher. At this point, unless you’re long from lower, I don’t think there’s a high percentage play on the Nikkei – I’ll be looking for futures to get back above 15k, or show some commitment to the downside (say below 14.5k) before entering anything.  Four hour futures chart below.

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Gold

Gold continues to look constructive here, consolidating slightly after its strong move yesterday. Continue to look for opportunities to establish longs above 1320.00, looking for a move up toward 1400.

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Futures have started this week off fairly stable, with no major moves in US Futures, and a stable (but still interesting) overnight session for the Nikkei. We did see Chinese markets take a sizeable step back last night as Shanghai was down 1.74% and Hong Kong lost 0.74%, but so far the rest of global markets are fairly stable.

The S&P

S&P 500 futures remain capped by 1840 resistance and are trading essentially flat here this morning. 1826.1 is the 50 period EMA on the four-hour chart – that would be the first support level. Below that we have support at 1810-1812, the 100 period EMA, the 200 period EMA (both on the four-hour chart) and a major horizontal support range. Until we get some sustained pressure under those key levels, bulls still look to be in good shape on the S&P. Chart below is a 4 hour chart.

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The NASDAQ

NASDAQ futures have made new all time highs, unlike the S&P 500 futures, but the NASDAQ is capped by ascending trend-line resistance around 3690. The first support level on the NASDAQ comes in at 3647 or so – the 50 period EMA on the four-hour chart, while the next support level is about 3625, which represents a major ascending trend-line and the 100 period EMA on the four-hour chart. Only a break of this level would really motivate bears, while bulls will be eyeing a break of 3700 for continued upside. Not much to do except play the range until we see a break.  Chart below is a four-hour chart.

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The Dow

The Dow is capped by 16.2k right now, and is setting up in a possible flag pattern with the 200 and 100 period EMAs providing support at the bottom of the flag, around 16k. Above 16.2k comes we see major resistance at 16.35k, which marks the descending trend-line connecting the two major highs since the end of last year. The chart below is a four-hour chart.

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The Nikkei 

The Nikkei had a very interesting session last night. Futures testing the major resistance level at 15k almost perfectly before fading lower as the session progressed. That 15k level represents a major trend line retest and the 200 period EMA on the four-hour chart, so its significance should not be overlooked. Above 15k would really start to squeeze some bears out and could lead to an aggressive rally. For now though the resistance is holding. Major support is really the 14.5k figure, below there triggers the bear flag. Until either of those levels breaks, play the range. Chart below is a 4 hour chart.

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Gold 

Gold futures have rallied to start the week, up 0.75% here early on Monday morning. Price has broken out to a new high, and looks well poised to continue its rally up toward the 1400 figure. 1330 -1320 is a good first support range. We are seeing some RSI divergence on the 4 hour chart, so a brief dip or consolidation would be neither surprising nor unwelcome. Chart below is a four-hour chart.

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We finally had a down day yesterday (Wednesday) with the Dow shedding 0.5%, the NASDAQ dropping 0.8% and the S&P 500 falling 0.64% as a late day sell-off sent markets tumbling a bit. The FOMC minutes yesterday were relatively hawkish with a few members calling for rate hikes sooner than expected, and everyone agreeing that the taper should continue as planned. There was no real concern expressed about the recent string of bad data and the Fed appears to remain confident in the recovery. As I mentioned yesterday there was some mention of changing the forward guidance away from the simple unemployment rate metric the Fed currently uses, so that will be something to watch at coming meetings.

The S&P

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The S&P 500 briefly popped its head over the resistance level mentioned in the last update, but failed to sustain its gains and eventually broke below support. Volume studies are again concerning for bulls and yesterday’s red candle saw better than average participation and higher volume on the futures than the last 5 up days. Still, futures are trading at support this morning, sitting atop a fairly significant horizontal level and the top of the daily cloud. Bulls would very much like to hold the 1810 – 1818 range to try and again push to new highs. 1840 stands as the major resistance level now, and we may see the index consolidate between these two levels for a time.

The NASDAQ

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The NASDAQ is also starting the day at key support as the 8 day EMA coincides with the previous highs at 3630 or so.  A decisive break below this level would open up 3591, which is the 21 day EMA. The NASDAQ continues to show significant RSI divergence and higher volume on down days, so we’ll see if bears can make another move here this week.

The Dow 

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The top of the daily cloud rejected Dow futures to the point, and the industrial index is now trying to break free of the bottom of the cloud. That development, which would also put price below the 8 and 21 day EMAs, would be greatly concerning to bulls. As has been the case lately, the Dow continues to underperform (somewhat dramatically) the S&P and the NASDAQ. Dow futures may now be forming a large right shoulder to complete the possible head and shoulders formation. 16200 stands as resistance, while the 16000 to 15900 area stands as support. Bulls will be looking to break the top of that daily cloud, while bears will be trying to put in a close below.

The Nikkei 

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The Nikkei remains very technical, holding its bear flag pattern very well as it continues to process the break below major trend-line support we saw on the last day of January. As long as the flag holds, bears are slightly favored, but only slightly. A break below 14.2k has the potential to really accelerate losses, so caution is warranted. 14.8k-15.1k is the resistance range, only above here do the bulls have a chance at seizing control. Continue to play the range until it breaks, and keep an eye on the Yen for possible clues.

Gold

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Gold futures have indeed taken a bit of a break, as mentioned in the last post, but they continue to look very constructive here. The four hour (not daily) chart above shows a clear bullish pennant pattern as price works off its overbought state. Continue to watch gold for a breakout higher – upside targets are about 1335 for starters. A break down out of the flag would negate and then we’d have to wait and find a new setup.

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2/18/14

Very little has changed in the futures markets these past 24 hours – the S&P 500 continues to flag under major resistance. A break above 1842 would open up significant upside while a break below 1830 could lead to additional selling pressure. We do have some significant data to consider tomorrow here in the states. Monthly building permits and PPI highlight the morning, but the major even of the day will be the release of the FOMC minutes in the afternoon. Traders will be looking for clues about the future of the taper and how recent data is being interpreted by the FOMC. We may also see the Fed discuss alternative ways of determining when to normalize rates. FOMC Chairwoman Janet Yellen discussed concerns with the unemployment threshold system the Fed currently has in place, so we’ll see if we get an adjustment (or a hint at an adjustment) tomorrow afternoon.

The Dow finished as a doji yesterday and remains trapped beneath the top of the daily cloud. A move below 16k would help the bearish case. Volume studies on the Dow continue to be concerning, with the rally seeing significantly less participation then the sell-off that preceded it.

The NASDAQ made another all-time high yesterday and continues to look relatively healthy. Volume and RSI studies are both flashing some warning signs, but so far nothing in price action has confirmed.

Gold may be taking a bit of a break now as price failed to sustain a new high yesterday. Considering its recent run, a consolidation or retracement in gold would be healthy and could offer a nice buying opportunity.

The Nikkei continues to flag and form its range – no major changes here in strategy.

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2/17/14

S&P 500

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S&P 500 futures are starting this holiday shortened week at some decent resistance near the all-time highs at 1846.5. A break above that figure could lead to an aggressive squeeze higher as the last remaining bears are taken out of their positions. The next resistance above 1846.5 is the 1860 area. The first support area we’re looking at is the 1813 area- some nice horizontal support there and the top of the daily cloud. The ascending trend-line that currently sits at 1760 or so is the key bull / bear line after it held early this month and sparked this recent rally.

NASDAQ

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NASDAQ futures made another all-time high on Friday and are in good shape going into Tuesday’s trade. As we are at all-time highs, all resistance levels are simulated and projected, so I’m focusing on support areas. Being the short the NASDAQ is a risk proposition until we see a clear bearish signal / setup. The first support level to buy against is the 3635-3640 area where we find some horizontal and trend-line support. We are starting to see (again) significant RSI divergence on NASDAQ futures and I’m still not thrilled with how the volume is looking, but price is price, and right now things look pretty good.

The Dow 

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The Dow finished the week strong, pushing above the 61.8% fib on Friday, and closing back within the daily cloud. The 78.6% fib (not a level I put a lot of stock into, though some do) coincides nicely with the top of the daily cloud right around 16250 or so, this could provide some nice resistance this week. The possibility for a large head and shoulders pattern on the Dow remains intact, and volume has remained relatively weak the past 4 days or so, but bears will need to step is fairly soon. A push above 16300 opens up a move back toward the all-time highs at 16540. 1600 is the first support level (bottom of the daily cloud).

The Nikkei 

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The Nikkei continues to trade within the range mentioned on the 13th, with 15k serving as resistance and 14k serving as support. The Nikkei overcame some early pressure yesterday to finish green, making (for now) a high low. There’s nothing really to do now but to watch for the range to play out and trade the break.

Gold 

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Gold has enjoyed a very strong run these past two weeks, but it is now entering a major resistance zone. A large weekly trend-line, the bottom of the weekly cloud, and the 200 day EMA (not marked on chart) all meet around the 1350 level on gold futures (GC_F). Gold will bear watching this week, because if it can clear the 1350 level with momentum and volume, we could be seeing the beginning of a major gold rally.

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2/13/14

S&P 500

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Markets shrugged off softer than expected retail sales and overcame a soft open essentially rallying bell to bell. The S&P 500 gained 0.6%, closing above 1820.  The move today also put the index convincingly above the daily cloud.  The 1846 all time highs are the next major resistance while the 1820-1800 range stands as support. Both trade scenarios outlined yesterday remain valid, but as the putative right shoulder pushes above its left counterpart, bears will start getting nervous. New highs would invalidate the major bearish setup. Volume today was slightly better than yesterday, but remained below the 10 day average. RSI studies are in good shape for bulls though, no major divergence and comfortably below the overbought levels on daily. If bullish, look for quick moves back toward the 1816-1812 range for a day trade higher.

Verdict: Bullish

NASDAQ

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The NASDAQ pushed through its previous highs today, gaining 0.95% and closing back within its broken wedge, another testament to the strength of this bull market. Again, while volume wasn’t as convincing as it could have been, there was more volume today than yesterday. There are no major signs of concern on RSI either, below the overbought level, and not showing any divergence. First level of support comes in at those previous highs (3635) and all resistance is just projected at this point as we trade at all time highs.

Verdict: Bullish

The Dow

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The Dow is the only one of the three major American indexes with a clear bearish setup intact. Today’s rally on the Dow failed to break new ground and the index remains trapped by the bottom of the daily cloud and the 61.8% fib of the decline off of 16,540. Still, with the way the other indexes are looking, shorts are probably inadvisable at this time. 16,000-16100 stands as the next resistance zone while 15760 is the level bulls will want to hold to keep the rally intact.

Verdict: At resistance

The Nikkei 

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The Nikkei has regained a lot of the ground it lost last night but remains trapped below that key 15k level and the key broken TL. A break above 15k would open up a move toward 15.5k, where a break of 14k is needed to trigger more selling. Play that range as it develops.

Gold

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I also wanted to throw in something about gold tonight, since it’s moving so well. I put out a buy call on $GLD on Sunday, but our entry price was never hit as the overnight price action caused an upside gap. Looking at gold here I see some decent potential for further upside in futures ($GC_F) as price has decisively broken above the descending trend-line and the daily cloud. Dips down to 1275 stand as very attractive buying opportunities over the next several days. Price is beginning to find its way into a fib resistance zone, and the RSI is drifting toward overbought territory so keep an eye out for dips to load up for a possible move back to 1400.

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2/12/14

S&P 500

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The S&P pushed above the daily cloud today but failed to sustain its move above 1820. Still, bulls managed to avoid a potentially scary daily candle close by pushing the index up just over 3 points by the close. Volume studies are a little concerning here as the volume on the most recent bullish days don’t quite match the volume we saw when the selling began. 4 of the last 5 days of buying have occurred on less than the 10 day volume average.  One scenario that comes to mind with this particular volume pattern is the formation of the right shoulder of a head and shoulders reversal. We saw lower volume on the last rally to new highs, followed by higher volume on the selling and now lower volume on the right shoulder formation. Just something to keep an eye on.

Still, no major resistance until the 1845-1850 area  where we run into the previous highs and a retest of the broken trend-line.  Tomorrow brings with it some medium level event risk with monthly retail sales and weekly unemployment claims.

Verdict: Bullish, but stretched.  If you’re long, bump your stops up to about 1788, if you’re short, plan to add around 1840 with stops above 1850.

NASDAQ

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The NASDAQ  rallied just over 0.25% today and just failed to make a new all time high above 3635.25, and so just failed to create a new batch of RSI divergence to consider. Still, the NASDAQ is pressed right into resistance here and offers a spectacular risk / reward short at these levels. A stop just above the all time highs with a first target of 3560 offers better than a 4:1 ratio, and has a decent chance of success. Again we see slightly lower volume on the recent rally than we saw on the selling that preceded it and again the last 4/5 advances were made on lower than average volume.

Verdict: Short against 3645, first target 3560, second target 3400.

Dow

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The Dow is showing a similar volume pattern as the S&P 500, and the technicals match as well. If the rally up to 16.5k stands as the head of a possible head and shoulders pattern then this current rally is forming the right shoulder. Right now futures have rallied up near the 61.8% retracement of the move from those 16.5k highs and is encountering the bottom of the daily cloud. The Dow has underperformed the S&P and NASDAQ so it may be the first to start to roll over if we are entering another period of selling. It is worth nothing that these potential head and shoulders patterns have formed before, even as recently as July of last year, and the bull market marches on.  Warning signs don’t equate to reversals.

Verdict: I don’t advocate trading the Dow. Bullish, but against resistance.

Nikkei 

The Nikkei remains the most bearish of the indexes I cover, as it remains capped by that key 15k level. Nothing significant has changed, so I will just quote what I said yesterday:

“Unlike the major US indexes, the Japanese Nikkei still has some significant resistance to content with, and its breakdown remains valid. Nikkei futures are currently testing the backside of the broken trend-line as well as a minor 50% fib and the 100 day EMA. Nikkei bears need to make their play now though, a sustained move above 15k would likely prompt extensive short covering and a rally back toward 15.5k.

Verdict: Bearish, but pressing. Sell against 15.1k, buy against 14k lows.”

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2/11/14

S&P 500 

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The S&P 500 has undergone an aggressive rally since hitting its recent low at 1732 on the 5th of the month. The index has jumped nearly 100 points in that time as “buy the f****** dip” appears to remain a sound strategy. Futures are now overbought on the four-hour chart and have rejected from minor resistance at 1820. That resistance extends up to 1840, but if we get above there  it looks like we could go way higher. 1795 -1780 is the first support range for S&P futures as it represents the 200 period EMA, 100 period EMA and 50 period EMA on the four-hour chart. Below there 1750 stands as the major, intact trend-line that sparked this most recent bounce.

Verdict: Bullish but stretched. Short against 1846, buy against 1780.

NASDAQ 

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Similar to the S&P the NASDAQ held its major ascending trend-line and has rallied hard since it’s 2/5/14 low. NASDAQ futures have managed to break above the bottom of the broken channel and are looking well poised to continue higher. Major resistance comes in at 3655 while support sits at 3590. The four-hour chart is also overbought, but the NASDAQ doesn’t have much in the way of resistance until we hit new highs. Even if we see a move back below 3590, the next major level of support is around 3530, where are three key EMAs are currently congregating.

Verdict: Bullish but stretched. Short against 3660, buy against 3585.

The Nikkei 

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Unlike the major US indexes, the Japanese Nikkei still has some significant resistance to content with, and its breakdown remains valid. Nikkei futures are currently testing the backside of the broken trend-line as well as a minor 50% fib and the 100 day EMA. Nikkei bears need to make their play now though, a sustained move above 15k would likely prompt extensive short covering and a rally back toward 15.5k.

Verdict: Bearish, but pressing. Sell against 15.1k, buy against 14k lows.