E-mini S&P 500 Technical Analysis by Unique

Private Mentorship Spots Available

2016-03-04T00:02:00.002-05:00

I am now accepting enrolment of prospective students commencing in April 2016.

Please email me at AAPLAddiction@gmail.com for details on the private mentorship program. Do not forget to include a brief message stating your trading experience and desired goals.

-Unique

EWT Analyst Position

2016-02-03T23:22:00.003-05:00

To those that emailed me and if anyone else is interested:

Here's the 10% discount sign-up link at https://www.elliottwavetrader.net/signup/unique

You get access to the trading room where I post intraday comments and the KISS reports. There's also a few other analysts that post in the main trading room with trade setups and road maps. It has a free 15-day trial with no credit card required for those experimenting. Good luck!

P.S. Currently, not accepting any more students for mentorship this quarter as I'm fully booked so you have to wait until mid 2016.

-Unique

A Temporary Goodbye

2016-02-01T22:23:00.001-05:00

I joined EWT ( https://www.elliottwavetrader.net ) as an analyst and the KISS reports and intraday comments will be posted there for the foreseeable future. Thank you for everyone's support and I'll see you there!

-Unique

E-mini S&P 500 Futures Weekend: Keep It Simple Stupid

2016-01-31T17:06:00.002-05:00

The Intermediate Trend Battle

Friday’s session was fairly simple as the overnight session consolidated in a tighter range and we noted in the Thursday’s night report that price contraction is generally followed by price expansion which means a fast and furious breakout/breakdown. For the entire week, the setup was a massive feedback loop consisting of higher lows and the major resistance of 1907.5. A sustain break above that level would setup the squeeze and buyers chase the bull train

During the day session open, there was a 5min bull engulf setup forming that we noted two minutes before the open. This paved the way for the hourly candle to become an 8EMA bull train acceleration setup as the bulls had a straight continuation pattern to 1900. Then, it hit the major resistance of 1907.5 and broke above the week’s high 1910 quickly. The rest is history as it was just a simple breakout and go pattern that grinded the 5m 20EMA/15m 8EMA train up for rest of the day. By the end of the day, it fulfilled the smaller 100% measure move at 1930 target.

What’s next?

Daily closed at 1931.25 as a large bull bar above the daily 20EMA. Major resistances are located at 1940, 1947-1950 and 1960. The battle between the daily bullish reversal pattern from the Jan 20 temporary bottom vs. the established weekly bear train should be an interesting phenomenal this week.

The Weekly/Monthly Chart Perspective and Context

Recall, the market has been a trading range of 300-334 points for the past 3 years between 1800 and 2134 as we noted in a few of our weekend reports. Now, the market is trying to go back to the half way point which is located at 1967. This means that the overall context is a 3 year trading range vs. the established weekly bear train setup. The weekly bears are looking for a lower high/rejection at 8EMA to keep this train momentum alive.

The immediate target of the smaller measure move at 1930 from Friday has been fulfilled. The other measure at 1950 remains valid as long as 1HR 20EMA keeps trending.

The Hourly Extreme Overbought Signal

Currently, the signal is looking for a confirmation at around 1940-1950 for the potential quick dip of 20-30 points. Unfortunately, we won’t be here on Sunday night to confirm this in real-time as we have other obligations to tend to.

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In short, weekly bears looking for a rejection this week to keep the bear train alive and daily bulls looking to continue their short-term assault to the immediate target of 1950. It should be an exciting week for us as we approach this market level by level with high probability setups.

P.S. I wonder if “everyone” is still long-term (3months to 12months) bearish after last week’s action :)

E-mini S&P 500 Futures: Keep It Simple Stupid

2016-01-28T22:11:00.002-05:00

The Week Long Tease

Today’s session was just a classic inside day; the first two hours of the day session already defined the range high vs. range low with the hourly candle wicks that aligned with the levels from yesterday. Remember, this entire week the market has basically been trading inside the daily shake zone levels of 1907.25 vs.1851.25 from the Tuesday KISS report levels. The market has consolidated and the hourly triangle range is getting tighter for the imminent breakout/breakdown. Overall, it was a pretty simple session as day traders had defined risk vs. reward scalps based on the levels we had provided intraday.

What’s next?

Daily closed at 1882 and it was a doji candle within yesterday’s range. Price contraction is generally followed by price expansion which means a fast and furious breakout/breakdown should be arriving very soon. Make no mistake; the market can continue this consolidation as long as it likes until the key levels such as 1907.5 or 1851.25 breaks decisively.

There are still no immediate targets or high probability projections as the market continue this shakefest. Our educated guess/bias remains the same, it favours short-term bulls as the chart pattern and structure of this temporary basing pattern suggests the daily 20EMA target to be hit.

Levels for breakout: break above 1900 with immediate follow through to 1907.50 opens up the immediate target to 1915 (daily 20EMA) and 1927.

Levels for breakdown: break below 1865 with immediate follow through to 1851 opens ups the immediate targets to 1837, 1820 and 1805.

Tomorrow is the weekly and monthly candle closing so it could be a wild ride as both sides duke it out. Last week’s candle was a bull hammer that was a sticksave from the multi-year major support and so far the bulls have failed to do a straight continuation to the upside. With the current failure from the bulls to do a straight continuation rally, it favours the accelerated weekly bear train in the coming weeks as long as major resistances such as 1920 and 1940 do not get decisively taken out. Again, we’re looking forward to next couple weeks as the market gets out of this shake zone so we get some easy trending moves riding the train.

E-mini S&P 500 Futures: Keep It Simple Stupid

2016-01-27T22:25:00.004-05:00

The Shakefest Continues

Today’s session was similar to any other Fed day where price gets tested at both the range high and range low. During the overnight session, the bulls defended the upper support and did not even let the bears retrace back to the 1875-1869 area as we thought it would before the blast off. When we woke up and saw the overnight price action, it gave us more confidence the market is going to hit ES hit daily 20EMA target today.

During the day session opening hour, the bears tried to retest the overnight low and attempt a breakdown but quickly failed as the bulls managed a nice 5m bull engulf candle. We entered longs at 1886 with an initial target of 1894 and the bull train quickly took off as we had a target extension to 1920 which was a roughly 5 points under the daily 20EMA at the time. We trimmed and trailed while riding this accelerated 5m 8EMA bull train up. However, the bulls couldn’t sustain the 1907.5 breakout and got rejected at 1910 and turned back to 1900 really quickly. Remember, the 1907.5 level is the Jan 19, 2016 high that we discussed last night and bulls needed to power through that in order to get to the daily 20EMA.

Fast forward to the 2PM FOMC announcement, we had a micro double top rejection that bears needed follow through below 1885 for the flush setup vs. bulls needed to reclaim 1895 in order for them to have a chance for the daily 20EMA target. Once the 1885 support broke and bears continued their assault below the overnight low of 1878.75, it opened up the immediate targets of 1869, 1858 and 1852.

What’s next?

Daily closed at 1878 and the market is still inside the shakefest zone of 1907.5 vs. 1851.25. The daily context is still a temporary basing pattern with major resistance at 1907.5 and the 20EMA that’s grinding down.

The weekly bear train is waiting for the shorts re-entry at 1920-1940 or when the market breaks below 1851.25 with immediate follow through below 1836.25 to indicate that the swing bears are back in full force. You have to remember that the Jan 20 was just a temporary bottom as we discussed before and the higher timeframe context is still bearish. Until major resistances such as 1940 and 1950 get decisively taken out, this is still swing bears’ fight to lose.

The monthly candle closes in 2 days as well; swing bears may want the bulls to sticksave back to 1920-1940 and close there. The reason is because a large monthly large bottom wick candle is generally unsustainable so in February/March the bears may get the chance to retest the prior supports based on the lower highs pattern.

There are currently no immediate targets or high probability projections. However, our best educated guess/bias favours short-term bulls as they try to retest the resistances and breakout based on the higher lows triangle setup. Our general roadmap is 1880->1920~ (daily 20EMA) ->1870 and it’s subject to change based on the overnight action. Remember, the market is just fluctuating from range high vs. range low defined by our “shake zone” levels. We’re looking forward to next couple weeks as the market gets out of this shake zone so we get some easy trending moves riding the train.

E-mini S&P 500 Futures: Keep It Simple Stupid

2016-01-26T22:47:00.005-05:00

The Pending Breakout Setup*

Today’s session was a bit surprising and tough to trade even though we pretty much nailed the general road map from last night’s report. The overnight session was just an accelerated 1HR 8EMA bear train that hit the 1860 and 1850 targets from the extreme overbought “A+ Tier” signal. Remember, we use two points as our margin of error so we considered the 1851.25 low as fulfillment.

At 4:00AM, the 30min candle was bull engulf along with the hourly candle being a doji. This provided the bulls with the sticksave setup of bouncing at least 25 points bounce as anticipated. The bulls fulfilled that criteria but exceeded expectations because the bounce was V-shaped and did not even need a solid pullback . At the day session open, we thought it was going to pullback a little first based on major resistance line ahead before it blasts off. The bull train did not care and immediately ran our scalp short stops, then rode the 8EMA train to 1892 and 1899 resistances in a timely manner. Overall, the regular trading hours were tough for traders if they didn’t buy within the first 30mins of open since most of the “easy money” occurred during the afterhours session.

What’s next?

Daily closed at 1888 as it closed a hair above 8EMA. The daily context is still a temporary basing pattern with the range being 1850 vs. 1904.25. It’s a shakefest between the range high and low but it’s large enough to make decent dough trading it.

Current Projections/Road map:

The overnight pullback targets 1875.5-1869.7 area which is the 50%-61.8% fib retracement area. Assuming this key zone holds, we expect a breakout tomorrow above 1899.5 with follow through above 1907.5 to get to the daily 20EMA target based on the current hourly and daily pattern. However, at this point this setup is *not a high probability setup compared to what we normally discuss in the KISS reports. This is due to fact that tomorrow is a FOMC/Fed day and we currently do not have a clear edge.

The alternative scenario is that 50%-61.8% fib retracement area does not hold and the market retests the previous night’s low of 1851.25. If that level breaks decisively, then it immediately opens up 1844, 1837 and 1830 as possible bear extension target

Current Plan For Tomorrow:

Limit position sizes, or stay in cash because it’s usually just a shakefest before the 2PM announcement. Then, the market does the initial move, the false move and the trending move to close the day. No edge, no trade.

E-mini S&P 500 Futures: Keep It Simple Stupid

2016-01-25T22:06:00.003-05:00

The Consolidation Ahead

Today’s session was fairly interesting based on the battle of the shorter intraday timeframes vs. the longer timeframes such as hourly and daily. First things first, as some of you already know the Hourly Extreme Overbought “A+ Tier” signal was confirmed overnight at roughly 1:45AM when I posted about it this morning at 8:57AM EST. That set the tone for day as long as prices stayed below 1905 along with the overnight lower high pattern.

When the day session opened, the micro charts were really shaky because the 5m+15m timeframes had double top vs. double bottom within the first 35 minutes. This created the shakefest for the morning session and most traders were probably feeling frustrated with the range. Once the bears broke below the 1886.50 level they had a clear shot at 1882 to accelerate the bear train. However, a 15m bull engulf quickly cemented the temporary bottom when bears couldn’t decisively break below 1882 that got sticksaved by the bulls. Fast forward, at 2:00-2:30PM everybody and their mother probably saw the clear flush setup with the consecutive lower highs rejection. Overall, pretty shaky day except the afternoon breakdown that stemmed from the massive feedback loop setup.

What’s next?

Daily closed at 1871.5 and back below daily 8EMA. The high was 1904.25 from Sunday night vs. the 1907 major resistance we discussed in the weekend report. This means that bears are actually stronger than we expected as they rejected the bulls’ attempt of breaking above major resistance like clockwork.

The Hourly Extreme Overbought “A+ Tier” Signal

As mentioned this morning, the targets are 1860 and 1850 and it invalidates above 1905. ES is trading at 1867.5 as of writing; bears should not let bulls retake 1877 if this is going towards the initial targets. This means that we should use 1877 as an ideal trailing stop.

Current Projections/Road map:

1842-1860 is a major support area for tomorrow and the bulls have a chance of being sticksaved there if the bears fulfill the extreme signal targets. Assuming this key zone holds, we expect a temporary bounce back of at least 25 points based on short-term oversold conditions. Eg. if sticksaves at 1855 then bounce to 1880, if sticksaves at 1845 then bounce to 1870.

The daily roadmap would be back to 1925~ which is the daily 20EMA resistance assuming the major supports hold the next couple days as it’s setting up for a 1-2-3 trend change pattern here.

The alternative scenarios are that this turns extremely bearish by breaking below 1836.25 and then we resume the daily 8EMA bear train. Or even the bears can’t break below 1865 and bulls manage an overnight sticksave back above 1877.

P.S. Targets from the Extreme signals are not the same as immediate targets so do not be misled.

E-mini S&P 500 Futures Weekend: Keep It Simple Stupid

2016-01-24T17:20:00.000-05:00

The Weekly Bear Train Shorts Re-entry

Friday’s session was fairly slow if traders missed the overnight rally that busted the 1883.25 resistance with the 1HR 20EMA bull train into an accelerated 8EMA by the day session open. During the day session, the bulls got rejected at the 1900 major resistance level on the first try and the bears tried for a reversal pattern on the hourly chart. However, the intraday bears failed to confirm the breakdown as the 1881.75-1883 key support level held and bulls grinded higher. It wasn’t an easy money session for traders if they missed the optimal entry from Thursday’s overnight entry and looking to hop on the train given that there’s major resistance ahead. Overall, we decided to take the rest of the day off around 10:30AM as we couldn’t spot any high probability setups left and didn’t want to partake in a potential shakefest setup. Always remember cash is a very great trading position to be in.

What’s next?

Daily closed at 1899.25, the bulls got their bottom wick hammer but it did not close at the exact highs.

Current Facts:

Daily chart is no longer an accelerated 8EMA bear train. Weekly chart still an established bear train. Monthly has 5 days left for the candle to close.

Recall last week’s report, we gave a little rant about how “everyone” became bearish in the long term (3-12months out) based on the previous two weeks action. The market has now formed a temporary bottom at 1804.25 and bounced almost 100 points. If you remember, the 1800 vs. 2134 range was the 3 year trading channel we discussed. Now, we are treating the current rally as a daily deadcat bounce vs. the established weekly bear train context. We will be using this thesis until bulls can at minimum clear above the 1967 resistance level which is roughly the half way point of the trading channel. Also, it is just slightly under the 61.8% fib retracement of the December high of 2075 vs. Jan 20’s 1804.25 low.

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Based on current projections, we expect the deadcat bounce to be rejected near the daily 20EMA which is currently 1937 (this number will change at 6PM Sunday open) paired with major horizontal resistance at 1907 and 1927. This means that if the weekly bear train is still strong as we expect, then the bears should reject it at this major resistance area coming up.

The current 100% measure move on the hourly chart for the bulls has a target at 1908. Funny thing is that our initial projection from the Wed Jan 20 report turned out to be fairly accurate. We were off by roughly 3 points as we expected the bulls to hold the overnight pullback at 1833, but instead they held support at 1836.25 and started the higher lows rally. Then, the next day the bulls continued the breakout with the sneaky overnight rally – goes to show that following a plan is much harder than it looks as we did not have much conviction trading on Friday after missing out the optimal entry.

The Upcoming Hourly Extreme Overbought Signal “A+ Tier” setup

We’re waiting for the signal to confirm on Sunday night or at Monday’s day session open to potentially short this deadcat bounce for quick 40-50 points down. We will update this in real time when the signal confirms, but our current expectations are anytime inside the 1907-1927 major resistance region.

Hypothetical Trade Plan/Road map

Run up to 1910-1920~ major resistance -> short back down to 1880-1870 based on deadcat bounce thesis -> see if makes a higher low or continues its way down to retest 1804.25.

(Obviously, a close above daily 20EMA would be unexpected and we would have to reassess in real-time and adjust our plans accordingly.)

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TLDR: Short-term wise we expect up first until 1907-1927 and we plan on shorting this deadcat bounce on the daily chart based on weekly bear train thesis.

E-mini S&P 500 Futures: Keep It Simple Stupid

2016-01-21T23:46:00.004-05:00

Daily 8EMA Bear Train vs. Temporary Bottom Part 2

Today’s session started off with last night’s pullback to the 1841 and 1833 support area as expected by our projection chart. Then, the overnight bulls the pullback and proceeded with the short-term relief rally. An hour before the day session had opened; the market made a double top vs. the Jan 20 high on the 15m chart. However, the bears were unable to break below the overnight lows and the bulls sticksaved back to the highs when the day session opened. This paved the way for the 1878.5 breakout level (Jan 20 high) that bulls were looking to squeeze to the immediate target of 1890. However, we soon learned that the intraday bull train quickly failed as it could not sustain above 1880 and moments later broke below the trending 5m 20EMA. Overall, the session was just a shakefest as our plan from last night was to trade small sizes. In hindsight, that initial breakout of the 1876-1878.5 level was a great false hope rally that trapped intraday bulls (including us) and the daily 8EMA bear train once again proved their worth.

What’s next?

Daily closed at 1861.5 and it was a spinning top candle showing indecisive action. This means that we are still expecting the shakefest to continue as long as the market trades in the 1883.25 vs. 1836.25 range. Above or below those levels, then the market should become much easier to trade and whipsaw less.

There are no immediate targets or projections for tonight because it’s just a shakefest and there’s no edge. Remember, this is still an 8EMA accelerated bear train, but the momentum of price is shifting with how bulls managed to sticksave on Jan 20 off the 1804.25 vs 1800 major support level. The market is trying to change the daily bear stance into a neutral to short-term bullish with this basing pattern.

Current Plan for tomorrow:

Same as last night, keep position sizes small as the shakefest continues. When above 1883.25 or below 1836.25, then it should become easier to trade by having an edge.

E-mini S&P 500 Futures: Keep It Simple Stupid

2016-01-20T23:42:00.001-05:00

Daily 8EMA Bear Train vs. Temporary Bottom

Today’s session started off with last night’s overnight breakdown below last week’s low of 1849.25. This provided the bears with the bearish breakdown continuation targets of 1834 and 1805.

When the day session opened, the bears got a chance to board the train using the 1HR 20EMA resistance. Shortly after, the hourly candle closed as a top wick rejection bar that engulfed the previous bar. Basically, the 1HR 20EMA bear train accelerated into 8EMA and as noted in the pre-market post about the major support levels. If 1831 breaks during the day session, the flush setup was in place and the major levels were 1813 and 1800 after. If 1800 broke, then the flood gates would open up 1775 and 1750.

When the bears fulfilled the 1805 measure move target from last night, it paved the way for bulls to have a deadcat bounce to 1820. As noted in our intraday comment, the bulls had a defined risk vs. reward trade using the major support level of 1800. However, we soon learned that this deadcat bounce was more than expected as the 30min and hourly closed as bull candles. At this point, we noted that if bears are unable to maintain the train below 1839 then a reversal bull train would be in the works. It was also apparent that if we had a 5min or 15m close above 1842 then the measure move for the reversal bull train targets 1865-1870 with the 1HR 20EMA feedback loop squeeze.

What’s next?

Daily closed at 1852 as a massive bottom wick candle, this means that the bulls most likely found their temporary bottom and setting up for a short term relief rally in the daily chart context.

We are currently projecting a potential pullback back to the 1841 and 1833 support levels (50% fib retracement 61.8% fib retracement) then bounce. However, the most ideal case for the bulls is to hold the 1850-1855 area if they want to setup an accelerated reversal pattern instead.

Technically, this is still an 8EMA accelerated bear train, but the momentum of price is shifting with how it closed today from the sticksave off 1804.25. If bulls are able to hold support tomorrow then we could be in for a short-term relief rally back to at least 1892, 1900 and 1905 in the next few sessions.

Current Plan for tomorrow:

Keep position sizes small as we could potentially shake inside the 1878.5 vs. 1804.25 for the entire session as most of the “easy money” has been made already.

E-mini S&P 500 Futures: Keep It Simple Stupid

2016-01-19T23:46:00.003-05:00

8EMA Bear Train Acceleration Phase Part 3

Today’s session started off with the Monday night rally back to the immediate targets of 1890 and 1900. This rally also fulfilled the targets from Friday’s hourly extreme oversold “A+ Tier” setup.

At around 8:30AM, price was trading at 1900~ vs. the daily 8EMA resistance which meant we had another high probability short as it is an accelerated 8EMA bear train until price proves otherwise. At the same time our hourly extreme overbought signal was confirmed and produced an initial target back to the 1885 support level with a possible extension to 1873. Long story short, the day was just a standard 15m 8EMA/20EMA bear train that gave everyone simple risk vs. reward short entries.

Near the end of the day session, another hourly extreme oversold “A+ Tier” signal confirmed itself at 3PM when ES traded over 1861. This signal gave us deadcat bounce targets back to 1895 and 1905 with an invalidation level below 1850. A few minutes later, the market bounced to a high of 1882.25 before topping. In hindsight, we now know this was a very cruel EOD bounce to suck in more buyers as the overnight session is trading at 1845 which is below last week’s low. Also, the hourly extreme oversold “A+ Tier” finally failed after a few consecutive wins.

What’s next?

Daily closed at 1872 and it’s another top wick rejection off the daily 8EMA. The hourly 100% measure move for the overnight bearish breakdown continuation targets 1834 and 1805. Remember, a key level for tomorrow’s day session will be the 1831 Aug 2015 low if bears are able to continue their overnight assault into the day session.

Major levels to note in case of a capitulation/mini crash: 1831, 1813, 1800, 1780-1775 and 1750.

Nothing has changed in the daily context:

Remember the Wednesday report: Overall, any bounce is just another short opportunity for us as long as this remains an accelerated 8EMA bear train. It is what it is, keep it simple.

Current Plan for tomorrow:

Ride the bear train until price proves otherwise just like the past two weeks. If a sticksave happens and the market goes back to 1878, then we might ride the feedback loop train up as well with scalps.

E-mini S&P 500 Futures Weekend: Keep It Simple Stupid

2016-01-17T23:22:00.002-05:00

8EMA Bear Train Acceleration Phase Part 2

Thursday Jan 14’s day session was fascinating as the bears tried to breakdown by forming a marginal lower low at the open. Immediately afterwards, the 30min candle was a bull engulf which created the massive feedback loop that had targets back to 1924 from the 1895 breakout level. Basically, it was just an “easy money” day trading countertrend to the bigger context of the daily 8EMA accelerated bear train. In the night session, the bears from the daily 8EMA bear train stepped in and had another short re-entry as 1HR 20EMA broke then rode it back down to the 1865 and 1850 major support (levels from the Wednesday’s KISS report) by Friday’s lunch time. Overall, last week was a simple, effective and methodical bear train in terms of risk vs. reward that had no surprises.

(We couldn’t write the Thursday update as we were in a meeting)

What’s next?

Friday closed at 1876.5 with as a 8EMA rejection and bottom wick. This means that the 8EMA accelerated bear train is still ongoing but Monday is most likely going to be an inside day based on the bottom wick and MLK half day schedule for globex trading. (Stocks are obviously closed)

The hourly extreme oversold “A+ Tier” setup was confirmed on Friday at 1855 which targets 1895 and 1905 with an invalidation level under 1850. This means that our immediate targets are back to 1890 and 1900 within the context of daily 8EMA bear train shorts re-entry mode.

Nothing has changed in the daily context:

Remember the Wednesday report: Overall, any bounce is just another short opportunity for us as long as this remains an accelerated 8EMA bear train. It is what it is, keep it simple.

Weekly + Monthly Chart Perspective (Rant alert, proceed with caution)

On the forums that we frequent, it seems that “everyone” is starting to become really bearish in the long term (3-12months out) based on the last two week’s action. It’s hilarious because we really don’t understand what the fuss is about since ES is still above 1831 which is the August 24 2015 low. Even if it breaks below 1831, we have massive major support next at 1813 and 1775 on the weekly and monthly timeframes. Well the market at least needs to break below 1831 first so the bears can prove that they have momentum going and this current correction has more downside targets ahead. Our point being, there are still two weeks for the monthly candle closing and that bears still need to prove themselves in the larger timeframes of weekly and monthly.

In other news, at the start of last week the market fulfilled our double top 100% measure move with a low of 1893.5 vs. the 100% measure move at 1891.75 target. Then, it made a deadcat bounce as expected based on our key 1892-1900 support area and hourly extreme oversold “A+ Tier” setup. The daily bear train is trading very methodical at the moment and does not have any massive breakout/breakdown setups like the one we warned about in late July 2015 before we went on vacation. Recall, the 8 months worth of consolidation during Feb to Aug 2015 between ES 2134 vs. 2034, this provided a massive feedback loop of trapped traders. Break either of those levels and you would likely have an easy money breakout/breakdown. Obviously, that feedback loop exceeded our initial expectations by 100 points as the original measure move was just 100 points from 2034. At this point you’re thinking what the heck are we talking about? Well, we’re just saying it’s important to approach the market level by level and not let the emotions get the best of us.

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Weekly has been below 8EMA and 20EMA since the Jan 8 weekly candle closing. It has a potential breakdown pattern setting up if 1831 gets taken out with follow through under 1813. Then, there’s massive support at 1800 and 1775 if that happens. However, remember the context of the weekly and monthly timeframes is that we’ve been trading in an 1800 vs. 2134 range for 3 years. This means that the weekly bears must first break below 1831 to confirm bear train momentum that the 1813 so that 1800 and weekly 200SMA at 1777 becomes possible. Until that happens, visiting this range low is just another great risk vs. reward BTFD zone for the intermediate bullish swing traders assuming the rangebound channel continues.

Some of you may be thinking the weekly and monthly charts also show a potential triple bottom pattern which statistically don’t hold well. Remember, the market could continue the range as long as it likes and that is exactly why we like to approach it level by level. At this point, some of you may think we are “permabulls”, but in reality we really don’t care if the market tanks or rallies hard in the long term context.

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Monthly chart has a 3 year rangebound market context vs “hold half and go” setup. Bears really need to break below 1831 first or keep the deadcat bounce below monthly 20EMA 1974~ in order for the long term bears to continue the potential bearish breakdown setup. Remember, there’s still two weeks left for the monthly candle close so do not be misled.

E-mini S&P 500 Futures: Keep It Simple Stupid

2016-01-13T23:39:00.000-05:00

8EMA Bear Train Acceleration Phase

Today’s session was an extraordinary display of prowess bythe bears as they hit intraday support targets again and again. The action really started from last night when the bulls broke higher vs. Tuesday’s high of 1940.25. We discussed the mini bull/deadcat bounce target extension was at 1950-55. (Remember, the bull targets were extension targets and not immediate targets as explained last night.)

The context and mental game plan from last night we had going into today’s session was for the bulls to hit the 1950-1955 target area then look for the swing bear train shorts re-entry. If you recall, last night’s daily 8EMA major resistance was hovering around 1953 and the daily swing shorts re-entry was likely going to be there. Fast forward, when the day session opened the market quickly topped with lower highs and dropped to retest the 1934~ 1HR 20EMA support. At this point, the setup for 1950-1955 was still possible as long as it holds above 1931-1932(overnight lows). However, the support was quickly broken and the setup invalidated shortly after which meant we had to be stopped out of our scalp longs. The next support was at 1923~ 1HR 50SMA and the chart indicated we had to quickly switch our stance from bull to bear. Even though our initial plan was to short 1950-1955 swing for 1892-1900 support, it never materialized as the market topped a few points before our game plan’s optimal entry.

At around 10:32AM, we noted of the 5m 8EMA bear train setup and it was confirmed by 11:05AM with the hourly bear train setup that had an initial target of 1910 from 1927~. Long story short, the bear train quickly opened up the next intraday targets of 1905.75, 1899, 1892 when 1910 was broken as the train accelerated and extended beyond the initial target. Then, if below 1892 it opened up the daily support targets of 1880, 1865, 1850 and 1831 from the weekend report.
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The point we're trying to make here is that you have to keep training yourself to be able to adjust your own pre-determined plan (in this case, shorting 1950-1955) accordingly as the market conditions/dynamics change and new opportunities present themselves. It also did not help that we had to leave the office for an hour from 1:30-2:30PM~ and thus we missed a lot of the “easy money” riding the bear train. Even for us “seasoned” traders, it was really hard to execute the new game plan while having an ingrained one from the previous night. We actually didn’t do well today as we struggled and made a few rookie mistakes such as order typos. We hope that sharing this play by play, it might be able to help some of you out there.

What’s next?

Daily closed at 1883 and the bulls got rejected by the daily 8EMA bear train. If you recall from last night’s report, the market was in a complicated phase with the hourly mini bull train/deadcat bounce battling against the daily + weekly bear train and today’s session and it was imperative to understand the timeframes. Today’s session displayed and proved that point to perfection as the daily bear train entered into another acceleration phase. This daily 8EMA acceleration is similar to the October-November 2015 rally, the bulls were sticksaved 4 times consecutive at the 8EMA. Currently, we count this bear having 3 sticksaves at daily 8EMA since January 4th, 2016.

This is a bear train until price proves otherwise (same as weekend stance). However, there may be a temporary bottom forming here because our hourly extreme oversold “A+ Tier” signal confirmed at 8:37PM tonight. The signals targets 1914.50 and 1924.50, as “A+ Tier” are usually 40-50points off the low/high. It invalidates when a 5minute candle trades below 1870. If this signal fails, it would most likely try to confirm again at 1865 or 1850 based on current circumstances. We have a tiny long position from ES 1878 as this is a judgement call* based on the bear acceleration phase.
The previous “A+ Tier” signal worked well on Sunday Jan 10 as our weekend report indicated the major support area of 1892-1900 as a possible temporary bottom. The signal confirmed itself around 8PM that night and provided a 35 point bounce from low to overnight high.

The Judgement Call*
The crucial thing to understand is that daily+weekly are bear trains and the bears just initiated the daily 8EMA rejection today so it’s more likely that they get follow through tomorrow based on historical data on acceleration phases. This is the main reason for the tiny long size instead of our regular size as we do not think this deadcat bounce could go hit the 1914.50 or 1924.50 targets before heading to 1865/1850 first.
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Overall, any bounce is just another short opportunity for us as long as this remains an accelerated 8EMA bear train. It is what it is, keep it simple.
Levels from the weekend report: the next major supports are located at 1865, 1850 and 1831.

E-mini S&P 500 Futures Weekend: Keep It Simple Stupid

2016-01-12T22:40:00.004-05:00

The Temporary Bottom Train Part 2

Today’s action started off with the backtest of support during the overnight session that was sticksaved at 1899 and subsequently the hourly candle had follow through from the bulls. At 4AM, bulls broke above 1HR 20EMA and the downtrend resistance line. This immediately paved the way for our immediate targets of 1933.5 and 1943.50. Basically, they ran the stops for the “swing” futures longs (including us) and then blasted off from the feedback loop.

By the day session open, ES traded as high as 1940.25 and formed an hourly doji vs. the major 1HR 100SMA resistance. We anticipated this as a temporary top and that bulls needed to backtest the 1HR 20EMA support at 1920 first before resuming up. The first try at 1HR 20EMA was sticksaved and made it to 1926.75 before collapsing and breaking below 1HR 20EMA. This created a mini 15m 20EMA rejection bear train setup and the bullish setup for 1955 target was looking grim and on life support. The main takeaway from today is that bulls were pushed to their limits once again similar to yesterday’s double bottom action at the 1892.50 low vs. 1892 major support. Today, it broke important supports of 1920, 1914-1912 and 1908 before being sticksaved at 1905.75. Afterwards, the hourly candle closed as a bullish engulfing bar and the rest is history.

What’s next?

Daily closed at 1922.50, it was a top and bottom wick candle with a larger body than yesterday. Bulls formed a higher low, but they could not close strong because in the last 30minutes they gave up 10 points. However, as of writing the overnight session is trading at 1937 and inside a breakout phase for 1950-1955 targets.

The immediate targets of 1933.50 and 1943.50 from last night were considered fulfilled at the day session open as 1HR 100SMA quickly proved to be a major resistance.

The extension targets are 1950-1955 with major resistance at the daily 8EMA currently 1952.6~. Remember, this is a mini bull train off the temporary low of 1892.50 within the daily+weekly bear train context. Note, extension targets are not high probability compared to immediate targets so there is a difference. The market is in a very complicated phase here with hourly bull train battling against the daily + weekly bear train, it’s imperative for everyone to understand their timeframes and trade accordingly.

E-mini S&P 500 Futures Weekend: Keep It Simple Stupid

2016-01-11T23:18:00.001-05:00

The Temporary Bottom Train
Today’s session was quite interesting for both sides, but at the same time it was fairly simple as the market basically followed our projections/expectations from the weekend report and intraday comments. At the Sunday night open, ES quickly tanked to a low of 1893.5, which was in the major support area of 1892-1900 we had labelled from previous report. This meant that all the immediate targets at 1900 and 1891.75 were considered fulfilled as our margin of error for ES targets is 2.00 points.

At roughly 8PM on Sunday with ES trading at 1903~, the hourly extreme oversold “A+ Tier” signal confirmed. This provided us with deadcat bounce targets at 1933.50 and 1943.50 which are 40-50 points from the 1893.50 low. Remember, the main difference between “A+ Tier” and the regular one “A” is quick 40-50 points vs. 25-30 points target. This paved the way for the overnight bounce and it got as high as 1929 at the day session open before bears made a double top bearish setup. In other words, the rebound was 35.5 points off the Sunday low.

For the rest of the day, we had projections for the dip to either hold 1902-1907 or 1892 low for the bounce setup. Long story short, the bears failed to capitalize on their breakdown setup by not breaking below 1892 and bottomed at 1892.50. This created the large feedback loop squeeze back into 1HR 20EMA as we noted around 2:14PM.

What’s next?

Daily closed at 1912.5 and it’s pretty much a doji candle/spinning top with roughly equal top and bottom tails. The large daily top 100% measure move has been fully fulfilled and now looking for a deadcat bounce in the context weekly bear train.

The bulls held the 1892-1900 major support area as we anticipated from the weekend report but they were really pushed against the wall by the bears as the temporary low was 1892.50. This means that the market is still trading in a controlled manner because major support held on its first try. This translates into very predictable movements with defined risk vs. reward and it is currently not in a crash mode like August 2015 as the context is different.

Unique, stop yapping - what are the immediate targets?

With the temporary bottom formed at 1892.50 from the hourly double bottom setup, the immediate targets are 1933.50 and 1943.50. These are from the hourly extreme oversold “A+ Tier” signal is still valid as the market remains above 1892 and coincides with the short-term measure moves. There’s a possible extension to 1955 and 1965, but ES needs to get above 1945 first in order for us to confirm it’s a high probability.

Remember, this is only a mini bull train for the deadcat bounce in the context of the bigger weekly bear train. You must understand the timeframes and trade accordingly.

If temporary bottom fails, the next major supports are located at 1880, 1865, 1850 and 1831.

E-mini S&P 500 Futures Weekend: Keep It Simple Stupid

2016-01-10T17:59:00.001-05:00

The Double Top Fulfillment and Temporary Bottom

Friday’s session was just a consolidation for most of the day then it had a bear train continuation around the close. In the morning, the bulls tried to break above the 1HR 50SMA but it was immediately rejected by the bear train once again - similar to Tuesday’s formation. In the afternoon, ES made it back to overnight lows and it had a standard 1HR 20EMA bear train setup. When the overnight lows broke decisively, it flooded towards the 1915 close that we expected from the intraday update. This was an accelerated 1HR 8EMA bear train into the close, this could setup the capitulation bottom for early next week.

What’s next?

Daily closed at 1913.25, the bear acceleration phase is doing great and price is entering towards a major support area at the 1892-1900. Remember the 100% measure move from the double top targets 1891.75. The 1915 intermediate target is fulfilled and remaining targets at 1900 and 1891.75 are transitioned into immediate targets.

This is a bear train until price proves otherwise. However, we are expecting a temporary bottom early next week (Monday-Tuesday) because the hourly extreme oversold signal “A+ Tier” setup is close to completing. This means that a 40-50 deadcat bounce may be in the works that could extend higher. This only remains valid if 1892-1900 holds decisively on the first try as there’s no major support until 1880. Long story short, this means that we are looking for a bottom from 1892-1900 for 40-50 points worth of deadcat bounce at this moment.

If bulls are unable to defend the 1892-1900 major support area, then next major supports are located at 1880, 1865, 1850 and 1831.

Weekly chart perspective: Large perfect bear candle closing decisively below 100SMA, if current bear train exceeds 1860 then a larger breakdown setup is forming.

Monthly chart perspective: The ‘hold half and go’ monthly candle setup from October is no longer valid at this time unless a massive sticksave happens next week.

P.S. Know your timeframes in this upcoming week as there could be a major buying opportunity for the temporary bottom/bear train extension.

E-mini S&P 500 Futures: Keep It Simple Stupid Series

2016-01-07T21:19:00.002-05:00

The Breakdown Acceleration Phase Part 2

Today’s session started with another 8PM breakdown similar to Tuesday’s overnight breakdown. Last night, it broke the 1970 support level and became an accelerated 1HR 8EMA bear train. Before the day session had even opened, all three of the immediate targets were fulfilled at 1960, 1950 and 1937.50.

The morning session was just a deadcat bounce into the 1970 major resistance which represented the backtest of the channel line. This provided the bears the opportunity to reload the shorts with a 1980 stop and for the next few hours the market tanked to the overnight lows. The session closed strong for bears as it closed near the lows unlike the previous 3 days where it was sticksaved by 15-30 points in the final hour.

What’s next?

Daily closed at 1934.50 as a large bearish candle that closed near the lows. It is also one of the largest one day losses since August 2015. It’s still in the acceleration phase for the bearish breakdown from last night so nothing has changed in that regard.

All the immediate targets were fulfilled today which means that the intermediate roadmap for the 100% measure move of the double top to 1891.75 is working according to plan. The intermediate targets are now confirmed at 1915, 1900 and 1891.75. The main difference between intermediate and immediate targets is that it’s a timing issue which means following the train yields the higher probability trades. For example, it could go back to 1975 resistance first from a deadcat bounce that then gets rejected and heads towards 1915. The main takeaway is to understand your timeframes and acknowledging the current swing perspective is bearish. Looking for re-entries on swing shorts at resistances should yield a higher win rate for the time being.

Today’s range was 1991 vs 1928.5, which is 62.5 points and there’s some oversold conditions which creates a medium possibility that tomorrow would be an inside day rangebound shakefest. If overnight/morning session doesn’t decisively break the 1928.50 low then it likely becomes a rangebound session similar to Tuesday Jan 5, 2016.

P.S. as we warned about stepping in front a train last night, today’s session was the epitome of this crucial lesson - staying away and hopping onto it instead of getting run over. We learned this from previous mistakes and hope others don’t have to endure the hardship in order to fully understand the probabilities associated with countertrend trades against an established train setup.

E-mini S&P 500 Futures: Keep It Simple Stupid Series

2016-01-06T22:20:00.005-05:00

The Breakdown Acceleration Phase

Today’s session started off with last night’s 1HR 50SMA rejection that soon broke the important 1980 level and triggered the immediate targets to open up. It rode the 1HR 8EMA bear train overnight and the first target at 1970 was considered fulfilled already (1971.25 low) before the day session even opened. Subsequently, this level provided a great temporary bottom for a relief bounce back into the 1HR 20EMA resistance so bears could reload shorts at around lunch time. The main take away from this session was that the bears are in a breakdown phase for the large double top roadmap. Remember, the potential is 100% measure move to 1892 and even half of that targets 1937.50.

What’s next?

Daily closed at 1986.75, but bears couldn’t end at the lows as bulls sticksaved during the final hour. However, as of writing ES is trading at 1964 as the sticksave was once again rejected at the 1HR 20EMA resistance overnight. Obviously, this week’s overnight movement are largely impacted by China’s 7% on Monday and right now. For ES, this is most likely the acceleration phase for the bearish breakdown that should become a 1HR 8EMA train.

The immediate targets from previous report are now confirmed as the 1980 level was broken last night. The short-term roadmap points to 1960, 1950 and 1937.50. The daily chart is already a 8EMA bear train as price is below all moving averages.The daily chart is already a 8EMA bear train as price is below all moving averages.

The 1950-1956 area is considered a major support so bulls have a potential to look for a relief rally there. (1956 represents the 61.8% fib retracement from Nov high to Sept low). Remember, this is a breakdown acceleration phase so we will only looking to reload shorts at resistances and not initiate long positions. The only exception being whether an hourly extreme oversold signal confirms at the 1960, 1950 or 1937.50 levels for a quick deadcat bounce trade.

P.S. it’s called a train for a reason, it’s a mental note to remind ourselves and everyone else to not step in front of it but rather hop on to ride it until it fails. We learned this key lesson from many previous mistakes as the probability just isn’t on countertrend trades in the long run.

E-mini S&P 500 Futures: Keep It Simple Stupid Series

2016-01-05T22:55:00.003-05:00

The Double Top Resurrection

Today’s session started off similar to our expectations from the previous report. Overnight session retested support and there was a spike under the 1995 level for a few minutes but ultimately it was sticksaved. Remember, this was the major support that bulls needed to hold for the 2020 and 2027-2030 deadcat bounce targets and ideally we wanted 2002-1998 to hold. Basically, the bulls were pushed against the wall overnight and came out ahead.

The day session opened and the first two hourly candles were top and bottom wick which further proved that it was just going to be an inside day shake according to expectations. Let’s fast forward to the key things to note from this session, there’s a micro double top/bear pennant on the hourly chart. Also, the daily doji candle closing could serve as a daily 100SMA rejection for the continuation of the daily bear train. Remember, we treated this bounce from 1988~ to 2010/2020 targets as a deadcat bounce only and the context was a daily bear train vs. hourly deadcat bounce roadmap. With the bulls getting rejected at lower resistance and keeping them below the 38.2% fib retracement, this bodes well for bears if they are able to break below 1980 tomorrow/this week.

What’s next?

Daily closed 2010.25 and still below all daily moving averages. The large daily double top setup is alive once again which is very similar from the one in the December 14 and 20 KISS reports.

Today’s session had a micro double top in the hourly chart which was where the bears rejected at the 38.2% fib retracement yesterday. This means that this is very advantageous for the bears as bulls were unable to even retrace to the usual 50% level according to our hourly extreme oversold signal deadcat bounce standards. Currently, ES is trading at 1988 as of writing, which means we cannot maintain our previous primary projection bias of a bounce revisiting 2020 and 2027-2030. This does not mean the immediate bearish targets open up either because the range is now 2017 vs 1980.25 for the shake.

A breakdown of 1980 would open up the large daily top setup to targets at 1937.5 and 1891.75 (which are the 50% and 100% of the measure move). If you recall the December double top setup, it had a 100% measure move to 1892 so the current setup is almost identical. The main ingredient now relies on the bears finally do their job and not letting the bulls sticksave once again.

There are no immediate targets right now and the 2020 target from before is considered a failure even though it reached 2017 high last night. The important levels are to break 1980 which open up immediate targets at 1970, 1950 and 1937.5. Be cautious of a 1980.25 vs 2017 shake for the time being.

For the bulls, as long as 1980-1985 key support area holds tonight/tomorrow they have a sticksave potential setup. This could provide a great risk vs. reward quick bounce trade. Remember, it’s key to know and understand your timeframes.

Current plan for tomorrow:

If overnight session is able to sustain under the 1995 level or breaks 1980, then will only enter short positions at resistances and ride the bear train. Will only trade long positions if reward is 2x the risk, for example buy 1983 with 1980 stop for 1989 minimum target. Going against the established daily train is not optimal for both novices and veterans and it greatly impacts long term profitability as the probability is not on your side.

E-mini S&P 500 Futures: Keep It Simple Stupid Series

2016-01-05T00:01:00.004-05:00

The Inside Day

Today’s session was fairly textbook as it all started with Sunday’s gap up open that was quickly reversed and broke below the December 31 low at 2037. In the weekend report, we noted that the bulls needed to hold 2016-2020 support area for the bounce scenario to remain valid, but bears quickly eliminated that potential by breaking support decisively around midnight. This breakdown created an immediate flood to the grey support area located at 1998-2000. Basically, the price and pattern was very similar to the green line projection 2016->2020->2000 as the white and red projections were invalidated.

Fast forward, when the day session opened and the flood continued until the December 14^th low at 1983~ was retested that created a double bottom setup. Our hourly extreme oversold “A+ Tier” setup was confirmed at 12PM lunch time and ES was trading at 1988. This provided us with a decent trade that had initial targets of 2010 and 2020 with a risk/invalidation level at 1975. What happened in the next few hours was just a typical first try rejection at the 1HR 8EMA level. It later formed a higher low with the massive hourly bull bar that erased the morning losses. At the end of the day session, the minimum target of 2010 was hit and now the 2020 target could be upgraded to at least 2030 depending on the overnight session setup.

What’s next?

Daily closed at 2009.5, this is still below all the daily moving averages. The candle is also a large bottom wick sticksave that has a day range of 63.25 points. This means that it’s very likely the next couple of days will be trading inside this range.

The immediate target is 2020. The 50% fibonacci retracement resistance is at 2027.63 and 61.8% at 2038.81. This rally is being treated as a deadcat bounce for the time being (similar to how we treated the December 21^st bounce as deadcat bounce that extended beyond expectations.) Also, any dip overnight/tomorrow should not exceed 1995 or else bulls risk a hard rejection by the bears to continue the daily bearish chart context. Overall, this means that the current thesis for this deadcat bounce could go as high as 2027-2039 before we change our stance that the bears are deemed too weak if bulls make it higher than that. Please view the last chart with the current white line projection as our primary bias if confused.

For the unexpected outside day scenario, bears must break below 1980 and maintain a solid bear train to the 1970 and 1950 key support levels.

Current Plan for tomorrow:

It’s a high probability inside day tomorrow within the 2043.5 vs 1980.25 range, so we will attempt to buy the lows or sell highs only to avoid getting bad entries on trades. Ideally, an overnight/morning pullback to 2002-1998 to add more longs for a quick trade. It really depends on how overnight session does when we wake up tomorrow and reassess the roadmap.

E-mini S&P 500 Futures Weekend: Keep It Simple Stupid

2016-01-03T23:29:00.001-05:00

The New Year

The last two trading weeks of 2015 were fairly simple in terms of risk vs. reward roadmap targets based on our hourly extreme overbought/oversold signals. The December 21^st week started off with an hourly extreme oversold signal “A+ Tier” setup confirming at around 12PM lunch time with ES trading at the 2000~ level. This provided us with a fantastic risk of 10 for 35-50 initial point targets of 2035.75 and 2045.75 that were soon fulfilled within 48 hours. (Remember, it usually takes an average of 24 hours and a maximum of 48 hours from the confirmation to at least the first target fulfilling).

The bounce extended a little bit as it was riding an accelerated 1HR 8EMA train to 2057. Then, it had a shallow pullback during December 23rd with the first hourly extreme overbought signal that held the 20EMA support that tested the 2057 highs again shortly after. Eventually, the hourly double top pullback formation from Dec 24^th to 28^th was sticksaved at major support 2035~ and the bulls managed to extend a Leg 2 rally into the 2070-2075 major resistance/ daily double top zone. This then gave the short term bears another hourly extreme overbought signal confirmation that paved the way to a quick 30-40 points flood scenario. When all is said and done, the market closed 1% red for the year.

What’s next?

Daily closed at 2035.75 and it is back below the 8EMA and 20EMA. The daily and weekly charts still show a large bull flag possibility while this rangebound market shakes traders around.

There are no immediate targets at this current time as we do not see any confirmed high probability roadmap. However, there is an hourly extreme oversold signal in the works that’s waiting to be confirmed tomorrow/overnight which should provide a quick 15-30 points bounce if so. The 2016-2020 support area must hold for this scenario to occur as the market is currently below daily 8EMA and 20EMA - showcasing short-term bearish aggression. The last chart attached shows our primary bias with the white projection line for the next couple days.

Remembering and understanding the different timeframes

Daily chart currently shows a bull flag rangebound market and the countertrend has consecutive lower highs/micro double top possibility.

Weekly chart still has a bullish ‘hold half and go’ within the large bull flag formation.

Monthly chart has been a 300~ points range bound market between 1800 and 2134 since April 2014. Remember, it was an accelerated monthly 8EMA bull train before that time period; it has now turned into a sideways 20EMA bull train within the multiyear bull market context.

Overall, it’s imperative to understand that we’re merely trading inside a daily rangebound market within a 300pt larger monthly range while inside a multiyear bull market. It is definitely large enough to make money trading it and traders should not be frustrated. As we saw a smaller range of 100 points for 6 months earlier this year from March to late August before the ‘easy money’ fast and furious breakdown.

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The more things change, the more they stay the same. We think this perfectly sums up 2015 in a nutshell which setups 2016 for another exciting and prosperous year as we help navigate these waters around the sharks. After all, it’s very rare to have two flat years in a row for the SPX/ES index.

E-mini S&P 500 Futures: Keep It Simple Stupid Series

2015-12-21T22:36:00.002-05:00

The Winner?

Today’s session pretty much went as expected according to the weekend update’s white line projection. The regular “A Tier” hourly extreme oversold signal confirmed at 10PM Sunday night that gave us a quick 10-20 point target to 2010-2020. When we woke up we realized the market made an overnight high of 2013.75 which fulfilled the signal’s target.

Before the day session opened, we noted that there’s a high probability it’s going to be an inside day. During the open, the market started with two consecutive hourly top wick candles that closed on the 1HR 20EMA support trapping traders on both sides. Shortly after, the bears broke 2005 key level and rolled over to test the grey support area around 1998. Subsequently, the hourly extreme oversold signal “A+ Tier” setup confirmed itself with targets to 2035.75 and 2045.75. This meant that a 40-50 point bounce is likely in the works as long as bulls hold above 1991. The next 3 hours was just a snoozefest shaking inside a 10 point range. When it seemed like everybody fell asleep, the final day session hourly candle closed as a massive bull bar that eclipsed the previous 6 hours in gains. However, daily still closed below all moving averages so this is still considered a deadcat bounce.

What’s next?

Daily closed at 2018 and it was an inside day. The bulls currently have the ball and it’s up to them to score because there’s a very clear double bottom/higher low setup that targets 2033-2035. This coincides with the “A+ Tier” hourly extreme oversold signal targets of 2035.75 and 2045.75.

There is still no clear winner as today was just an inside day. Bulls still need to retrace above Friday’s high of 2029.75 and bears need a break below 1991 to continue the bear train assault. However, our bias remains the same which is the white line projection from the weekend report. If the market is really following our white line projection, then bulls must hold above 2010 in order to march towards 2035-2045. This means that tomorrow/Wednesday “should” reveal the winner for the intermediate roadmap of either Santa Claus Rally or the daily Double Top bear train. If nothing happens, then a rangebound shake between 2020 vs 1995 becomes a real possibility.

Knowing and understanding your timeframes is extremely important as we head towards next year. The weekly chart has a giant bull flag setup and a minor double bottom sticksave. For bears they must absolutely break below last week’s in order to keep the momentum alive for the bear train daily double top setup to 61.8% fib at 1932 and 100% at 1892. The monthly chart still favours bulls based on the large bull candle from October providing the market with the “hold half and go” setup.

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This is the last KISS update for 2015 as I take a two week break in order to rejuvenate and cherish the moments with family and friends. Admittedly, I wasn’t able to end 2015 on a high note as December has almost always been a tough month for me. Regardless, this year has been fun and intriguing along with great prosperity. Wishing you all a very Merry Christmas and a wonderful Happy New Year! May all your dreams and goals for the coming year be fulfilled.

E-mini S&P 500 Futures Weekend: Keep It Simple Stupid Series

2015-12-20T14:39:00.000-05:00

The Final Reveal

Friday’s session was just a continuation of Thursday’s large daily bear engulfing candle. The overnight session made lower lows and when the day session opened the first hourly candle was a 1HR 20EMA rejection. This kept the train intact and accelerated into an 1HR 8EMA bear train very quickly. The bears didn’t stop until they made it to the 2000 target which was the next major support after 2022 was taken during the overnight.

A quick recap of what occurred this past week:

Monday deadcat expected from the hourly extreme oversold “A+ Tier” setup, formed a bottom wick candle

Tuesday continuation of the deadcat bounce marching towards the 2054 target

Wednesday closed above all moving averages, treating this rally no longer as a deadcat bounce

Thursday hit the trendline resistance and rolled over, daily closed as a massive bear engulfing candle that retraced all of Wednesday and half of Tuesday’s gains

What’s next?

Daily closed at 1994.75, this is below 1998.50 which mean the daily double top setup came back to life. Bears must break below 1983.25 to continue their assault and prove their momentum. Remember, the 61.8% fib of the double target resides at 1932.68 and 100% measure move at 1892.

The immediate targets are 1985 and 1970 (same as last weekend) from the bear train. However, the market is facing a very complicated situation with the hourly extreme oversold signal waiting to be confirmed vs. the on trend bear targets. Currently, our bias is the white line projection followed by the red which has a 40-50 point deadcat bounce in the works.

The main difference this time is that the signal has not confirmed yet on Friday Dec 18^th as opposed to the December 11^th initial confirmation followed by the December 14^th morning confirmation.

The first two sessions of next week will likely reveal to us the winner of this year’s final battle between the bulls and bears. The winner decides the fate of the intermediate roadmap of Santa Claus Rally or the daily Double Top.

The Hourly Extreme Oversold Signal “A+ Tier” setup

Last weekend’s projection worked out well as the signal got invalidated below 1995 but confirmed itself again during Monday’s session which led to a 50 point rally that extended into almost 80 points. This meant that the 40-50 point deadcat bounce target was fulfilled easily.

Now, we have a similar situation with the same support levels at 1995, 1985 and 1970. The signal will try to confirm itself at those levels and give us a 40-50 fast and furious deadcat bounce from the low. (Remember, we treat everything as deadcat bounces when daily is below all moving averages.)

We will see if the signal confirm during the Sunday night session and we have attached a projection chart similar to last weekend’s report. The difference this time is that bears have a slightly better chance at breaking down than last time because this is their 2^nd try.

Our executed win rate for the overall hourly extreme oversold/overbought signals remains at 80%~ with over 200 trades across multiple instruments since we started tracking it around 5 years ago.

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Fun fact: SPX cash index needs above 2058.90 to become a green year.

E-mini S&P 500 Futures: Keep It Simple Stupid Series

2015-12-17T22:21:00.001-05:00

The Final Battle Part 2

Today’s session was fairly straight forward as it was very similar to what was expected from last night’s report. The overnight session made a marginal higher high that tested against the major downtrend resistance line and bears found their footing. During the premarket, we shorted at 2070 when we saw the overnight pattern and the hourly extreme overbought signal confirming again. The trade had an initial risk of 3 for 10 that we trailed into a homerun for the 2054 and 2038 target extensions.

The bears had another chance to hop on the bear train with the 15m 20EMA rejection in the afternoon but unfortunately we had to step away from the office and missed it. Admittedly, we did not expect 2021 to be hit until Friday, but the bear train was impressive and fulfilled it with the second leg by the end of the day. This goes to show you never want to step in front of a train, but rather just hop on and enjoy the ride of high probability setup along with the great risk vs. reward. Overall, it was just a 15m 8EMA+20EMA bear train re-entries day so bears had a field day scalping and intraday swinging short.

What’s next?

Daily closed at 2023, this is below all the moving averages except the 100SMA. It was also a large bear engulf candle, which suggests the “hold half and go” setup/straight continuation down.

Bears did a great job today as we discussed the possibility of a hard rejection in the 61.8%-78.6% fib retracement area last night. The immediate targets of 2045 and 2038 have been fulfilled.

Our thesis remains the same, as long as no daily close below 2022 then the odds favour the bulls here based on the statistics of Santa Claus Rally since 1950. A close below 2022 with follow through below 2000 would be a huge threat to the bulls as the double top setup would come back to life. Remember, double top 61.8% fib targets 1932.68 and 100% measure move at 1892.

Currently, the hourly extreme oversold signal confirmed at 2017.50 around 8PM so it is setting up for a bounce tomorrow.

There is no immediate target for tomorrow as it is monthly options expiration and quadruple witching. If the usual happens, then we expect a quick bounce to find a range high and then range low to kill both sides then flatten at lunch for the decay.

What really matters to us is whether daily closes above or below 2022. Then, early next week Monday and Tuesday shall give us the final battle confirmation of the intermediate roadmap. It should determine whether the market is heading towards 2105 or 1945.

Current plan for tomorrow: trade 8AM – 11AM and peace out.