merkd1904

Bulls out there just doing their best

AMEX:SPY   SPDR S&P 500 ETF TRUST
Maybe they'll get a gold star, who knows.

Also, weird signals throughout the market today.

This morning we had a curious dislocation in the markets with IWM , and DJI leading in the premarket. Usually when i see this it is indicative of a healthy, thriving economy, and market. Or at least the projection of such. Which is odd, because we had so much doom and gloom last week. This is also indicative of higher prices incoming. But, banks were not participating either, and bonds grinded even higher again today. Mixed signals.

So, did everyone go home for the weekend, and all the sudden showed up to the market bullish again today? Maybe. The facts are we closed above $300/$3000 Friday which was a point for the bulls. But we closed below the 200 period MA, that was a point for the bears. And we also had a marked sentiment change to bearish about a week and a half ago and bulls were getting essentially plowed through.

The bulls are trying to bounce us from $3000/$300, that's obvious. The question is how high, how far, and how fast. What this really felt like today was a squeeze. It was for me at least, but at the same time i stated Friday i was completely prepared for this. You can see it coming from a mile away. But, is it just a squeeze, or a trend change? Well, considering volume was dismal and as soon as any came back into the market we moved lower and the bulls struggled basically that last hour to fight the downward volume , and finally, in the last 2 mins of trading made a new high. That's anemic to me. It's window dressing. Speaking of window dressing, the monthly close. Don't forget about that. On Friday it looked UGLY. In my opinion this is just a low effort "well, we gave it a shot" try by the bulls in an obvious spot. That and we (barely) closed above the range we created late last week. Meaning if you shorted late last week you likely are seeing red or had to cover. But, the tape wasn't really showing a lot of that from what i could see. This also could be the buy the dip crowd trying to stage a college effort bounce, or people trying to front run the macro numbers we have coming this week and next. To me it feels, and smells like a bull trap. (famous last words).

There was no question IWM was leading today. From last night's futures open to this morning it was leading in percentage gains by a pretty wide margin. This is curious to me. Because IWM is one of my leading indicators and the technicality of this is that we're bullish , and we're headed higher. But the macro is telling me the opposite. IWM and XLF led the last leg up by a large margin and if you jumped in it paid. But XLF is stuck in the mud, it basicaly gapped up and stayed flat all day. DJT was on the bull side today too. This shows a pretty wide breadth of stocks all wanting to go higher. Oh yea, VIX just printed a bearish engulfing on the daily as well.

This is while the meme stocks got whacked today. FSLY was down about 11% at one point, and ZM down over 5%. The stay at home stocks were getting smoked. Which is again curious, as "ThE vIrUs Is CoMiNg BaCk". Did anyone hear any virus news today? No? Me neither.

DJI was also showing relative strength last night but honestly i'm going to chalk up DJI's strength today to BA's 14% gain. Rising tides lift all boats. But again RTY ( IWM ) was up almost off the bat, meaining this is actual money positioning for something.

Also don't forget
A.) short week - The market's are closed Friday for America's bday.
B.) LOTS of econ data out this week. Non farm payrolls. Chicago PMI. Consumer confidence, etc.

So this may be front running for the gigantic beats we've been seeing in some of these projections. Remember last non farm payrolls? We gapped up like 80 points. We already had one today we housing data. Which, after two months of 0 activity it had a 44% jump. I mean, that should have been expected. But i digress.

Technically there are a couple things to pay attention to. Some of them bullish , others bearish .

On the intraday we basically have a broadening wedge , which is generally a bullish reversal sign. And also, if this squeeze is proper we have to get above the high from the last squeeze from Thur of last week. And if we do, and hold that area we're going higher. Upward targets are still $305.87, Friday's open at $306.16, and most importantly the top of gap at $307.31. All of that could happen in the first hour of trading tomorrow. If we get past that, we're headed back to $310, and possibly going for the gap fill at $312. Remember, gaps are like magnets. And now we have (more) of them above and below.

5m showing a gap fill, and low volume liquidity hunt (covered that Friday, how you didn't get caught) under $300 and eventually the bulls taking it and running with it but on absolutely terrible volume . Only real volume was the last 10 mins of the day to save from a bearish close. Above $300, above $302. If you're a day trader this would have been a textbook gap fill trade.


And here's where it get's interesting on the 1h. Any way you cut this this is a descending triangle . There's room to the upside but not much. BUT, since i've been trading and in a raging bull market these played out less often than they should on the larger indexes

Daily regaining $304.31, but again. Showing horrible volume . We only traded just under 79m shares (less than last weeks short squeeze) and 7m of that was in the last 10 minutes of the bulls trying to print a super bully closing print

Look at this. SPX 5m. We traded directly to $3000, even breaking it for a split second, and bounced directly off of it. In these low volume markets you can do things like these. That was the target, they hit it, and reversed for a 50 point gain. If you caught that bottom you just got paid.

Same with IWM . They went to fill the gap. Wicked down near it, and traded away. That's a home run trade if you caught it. Also note how back they wanted that $141.38 number

Just realized that sick little short squeeze on IWM too. Look at how nice that bear flag was, only to be gapped up in the morning. Also note we reversed as soon as we went for the gap. If we get rejected again tomorrow that's not going to bode well

Leading. With a close above last Thursday's open

Bearish engulfing on the VIX . Not a good sign for bears, and a welcome one for bulls. Also keep in mind this thing has been coiling up for about a week or two. The next move is going to most likely be outsized

XLF , looks awesome of the screener (+1%), terrible on the chart

DJT effectively with a bounce off of it's 100 period MA and regaining it's 13 period EMA . That's a start

NDX showing a bounce off of resistance, but still under it's much coveted 13 period EMA

DJI showing a retest of the broken triangle

Silver just, still doing nothing. The rising wedge didn't play out. So this is what i have for now, a megaphone. Silver looks like it's not getting any attention but when it does it's going to move

Gold with a gap fill and trading away, bullish

This makes me ever suspiscious if we bounce. This is a realtively large move with bonds. Now, it could be that "record inflow" from portfolio rebalancing but at the same time we're almost back up to the upper bound of the range, and that generally signals uncertainty in equitites.

Mixed signals. Half point up. Half point down. I honestly feel like this is going to be a half assed try at a bounce before we head back to retest $300. We were oversold on ES on every timeframe into the 2h and this very well could be just a counter trend rally. But with that being said we now have a decent amount of gaps up above us, and if the econ data comes in better than expected that might act as a slingshot to go fill them. Regardless, another week ripe for shenanigans either way.

That's why i always say keep your head on a swivel. Happy trading everyone.

This is not trading advice. This is my own personal opinion based on your own peronal TA. You are responsible for your own trades.

Comment: Oh, i forgot to mention.

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Comment: We're going to open up slightly down to flat. Powell and Mnunchin are set to testify in Congress today. It's going to be whoever's game today. Just depends on who shows up to play.

Comment: Also, look where they took the price in AH's. Directly to $305.87.

Comment: Slightly more volume than yesterday's gap fill. But usually path of least resistance is up.

Comment: Chicago PMI came in under estimates. Took some wind out of the bulls sails. Consumer Confidence up in a few minutes.

Comment: Consumer confidence beat.

1 to 1 on econ data today.

Comment: They're trying to get the hourly close above $305.87. Looks like they want to go for the gap and close from last Thursday ($306.15, $307.31).

Comment: IWM about to fill the gap already.

Comment: Came up .06 short. If they go back for it they'll go higher. We'll see if the bears can take the ball. We've essentially gone straight up since open.

Comment: Gap filled on SPY. Overbought on the short timeframes.

Comment: IWM bears showing up to raid the bulls beer stash.

Comment: Looks like SPY bears got the text too.

Comment: Keep in mind if they close above the high from Thursday that's bullish. First on an hourly, and secondly on a daily.
Comment: Was out getting food - Algo's popped at 12:33 on Huawei and ZTE being designated national security risks. No bueno for China/US relations and sure to piss Xi off. It was conveniently done at a crucial point or the bulls and as Mnunchin and Powell are set to talk to congress again. We'll see how it plays out.

Comment: Volume obviously died. We're riding $305.87 as support. If it holds, and bulls want to take us higher the downtrend line, as well $310 are the next targets..

Comment: BBands tightening. Should have a decision on where to next here within the next 30

Comment: Triple top or cup and handle?

Comments

I’m going to say triple top
+1 Reply
merkd1904 KCURCIO
@KCURCIO, Volume coming in.
Reply
thanks for the updates!
+1 Reply
This is extremely great content. Thanks
+1 Reply
merkd1904 TrendTraderX
@TrendTraderX, Thank you for that.
Reply
You were right...you admitted you were prepared to take some pain heading into the end of the quarter. I think it will pay off..I hope so for myself as well lol. Interesting day and I'm with you on the squeeze aspect. Just not much to believe here with this bounce.
+1 Reply
merkd1904 KCURCIO
@KCURCIO haha i appreciate that. The only unknown is going to be the econ data. But you have to risk in order to get the reward. If it does start moving against me hardcore i’ll just have to adjust. Market gives no fucks, does what it wants when it wants.
+1 Reply
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