Daily: Price got lifted to new high, but with now real momentum. Actually it can be still considered as a range top with some spike attempt above. Look at Ichimoku components: Tenkan and Kijun very close to each other, both flat. Not pointing anywhere. Senkou A and Senkou B (future cloud) flat as well. ADX below 20, DMI shows undecision too. Slow Stoch is overbought, looks like turning down a bit (not yet signalling a sell). MACD negative divergence compared to price action. Bulls really need a quick momentum gain, otherwise more profit taking will send price lower again. Start watching Kijun Sen, which is higher a bit now. In case daily candle closes below Kijun (1967), then we may see a bigger dip than last one, with also chance for a weak Tenkan/Kijun bearish cross.
4 Hrs: Ichimoku is bullish, but DMI-ADX shows lack of momentum here as well. Bulls would like to see it higher I know, but somehow they get all what they want to buy.
1 Hr: Price in the Cloud, means undecision. Chikou confirms it as hit price candles. I don't know if this uptrend line is poperly drawn, but looks like a break soon. Key level is 1982. If Price trades below that, it will go lower in teh range again.
Supports are: 1982 / 1967-1971 / 1946 / 1925-1930
Since I still believe SP500 may be stuck in this range, I would use 1 Hr time frame to look for short entry below 1982, with initial Stop at 1990. Trade size is 0,5-1 unit maximum.
Additional observation: Even with SP500 hitting new high yesterday, VIX futures kept well bid. August VIX could not go below 12,90. CPCE is increasing, so there is clearly a protection buying on options mkt. Probably those options traders who sell the puts need to delta hedge, that is one reason why the underlying SP500 and the E-mini SP futures can not get further bullish momentum. Number of Stocks (SP500 components) above 50 days SMA and those above 200 day SMA have been decreasing since the previous peak, which means single stocks participation it this Bull phase is less and less.
Comments
Kumowizard
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Update: It starts to look worse now. Daily ADX started to pick up, with bearish DMI widenning. Slow Stoch Sell signal, with MACD down again.
On 4 Hrs chart we had a weak bearish Tenkan/Kijun cross, Chikou Span hitting price candles. Watch for very important 1966 support - this is daily Kijun Sen and 4 Hrs Kumo. If price breaks below this level, I bet it won't stop at 1950-1955, but will quickly dip to 1925 support.
Kumowizard
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Break seems to be working for now. I opened the short as planned. Meanwhile DAX is collapsing too.
Ansari
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hi,Interesting and useful,many thanks.
Kumowizard
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Welcome. Btw it is same patter today. SP500 not yet really selling off, but VIX being lifted. Clearly an option game behind the scenes towards Put protection. The later it happens, the more quick the next drop can be.
Ansari
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I want to buy XAUUSD and sell DXY and SPX ,Do you agree?
Kumowizard
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You can buy Gold, but use a tight stop, e.g. 1284. Pls check my yesterday comment on it in my previous post: tradingview.com/v/hsiwPAsm/ check my last comment there.
DXY you can try top hunting, but even though it has some chance to work, I don't really see any sell signals yet on lower time frames. I would rather buy it ard 80,55-80,60 again after a pullback in line with the bullish trend. My last comment from yesterday on DXY you can find here: tradingview.com/v/KH4HMiBN/ I am still long USD since this post. I reduced some here at this possible resistance ard 81,00, but still hold other part of my long position.
SP500 short seems a good risk reward now.
Ansari
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I always follow your interesting ideas,many thanks for your perfect answer.
Kumowizard
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Feel free to ask any time!
Ansari
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You are my master,I want to learn from you,
Kumowizard
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Thx :-), but I am just a regular guy, who you believe or not still makes mistakes, even after 14-15 years of experiance. Anyway, I am always happy to help anybody who has problem with understanding a system, or even those who have psychological problems.
You have to become your own master. Following ideas is good, but the best is when it is in line with your own view on any instrument. The most important is to kill all kind of emotions and ego. You always have to have a high level of disciplin and consistency.
Do you know the story of the Turtle Traders? If not, that book is a must to read.
Michael Covel: The Complete Turtle Trader
forex-warez.com/Free Download/Michael Covel - The Complete Turtle Trader/
This experiment proved, anyone can become a succesful trend follower, if he/she keeps the rules and put hard work into this job.
btw I have the idea to do this experiment again myself, but I am too lazy to work it out properly :-)
On 4 Hrs chart we had a weak bearish Tenkan/Kijun cross, Chikou Span hitting price candles. Watch for very important 1966 support - this is daily Kijun Sen and 4 Hrs Kumo. If price breaks below this level, I bet it won't stop at 1950-1955, but will quickly dip to 1925 support.