It's official. As of tonight, China and the US are starting to put pen to paper on a trade deal. The overnight futures rushed to 2798 when Reuters broke the story. This news comes after weeks of hearing about a 'trade deal coming' and the market pushing higher on every notice.
As I type this, the futures are coming off of their session highs (now around 2794) and my guess is that tomorrows open won't see the futures much higher than this. Most people were looking for resistance in the 2810-2850 range so it would be perfectly apt that we never even see those numbers. Besides, a very subtle 5 month trendline (drawn above) is in play acting as resistance.
If you have access to the overnight markets, I would short the futures here at 2790-2798. I do not think we will see an up-open in the market.
Furthermore, any break of the support trendline drawn above will mean much further downside to come. However, I suspect that trendline break will not occur until next week.
Short SPX between 2790-2798
Target: 2750
Stop: 2805
As I type this, the futures are coming off of their session highs (now around 2794) and my guess is that tomorrows open won't see the futures much higher than this. Most people were looking for resistance in the 2810-2850 range so it would be perfectly apt that we never even see those numbers. Besides, a very subtle 5 month trendline (drawn above) is in play acting as resistance.
If you have access to the overnight markets, I would short the futures here at 2790-2798. I do not think we will see an up-open in the market.
Furthermore, any break of the support trendline drawn above will mean much further downside to come. However, I suspect that trendline break will not occur until next week.
Short SPX between 2790-2798
Target: 2750
Stop: 2805
Comment:
Head and shoulders being formed on the hourly ES chart. We are at the top of the right shoulder. So we can short ES/SPY/SPX here with a tight stop.
Trade active
Comment:
We can easily define our risk here right up against the trendline. It's also options expiration Friday with a lot of OI on the 280 strike in SPY so it is unlikely we close above it.
Trade closed: stop reached:
Stopped out on more China news. Tough to be a short in this market!