But seriously last Thursday i pointed out that the way they'd try and get us over this resistance level that has proven a bane for all indexes besides NDX was to gap over it. And sure enough, that's what happened.
Last night futures gapped up at open and we literally traded in a straight line directly to the level that would have been resistance and traded through it during the Asia session, and kind of just went sideways until we opened today. Shenanigans? Fate? Who knows. But, in all ferociousness i wonder what Trump paid Xi to have them run that front page editorial last night. It wasn't just contained to China though. The entire global market rallied seemingly from futures open all the way to the cash session today when for some reason the wind got taken out of the sails.
Scoreboard: SHCOMP (China): 5.71% HSI (Hong Kong): 3.81% Nikkei (Japan): 1.813% ASX (Australia): -.23% (Remember, China's mad at Australia right now) DEU (Germany): 1.64% LSE (London): .33% (yea, got nothin)
So in short the Chinese state government came out and asked their people to buy stocks. And boy did they buy stocks. They also bought our indexes. At one point having RTY up almost 3%.
But, that didn't necessarily bleed into our cash session. I was fully expecting a gap and go and for us to have a proper breakout from the range because we were no longer bound by the chains of $300-$315 but we essentially treaded water all day. Same with the EU session. We had the exact opposite of the type of volume i would have thought we were going to have and we literally just sat there while the bulls (algos) defended the breakout area 315.50ish. We also had every chance to fill the gap at $319 and invalidate the island reversal, but didn't. This isn't bullish behavior. This is a breakout, act as such damnit! We did fill one side of the gap from the island reversal today, but left the larger one.
But on another curious note VIX was actually up as much as almost 2% today, and IWM was only up .72%. Indecision. STILL. You pair that with the lack of participation from large money and the writing is kind of on the wall. No one wants to climb that wall of worry, yet. Now, bank earnings start next week so we may be seeing people scaled back on positioning until they see how earnings lie over the next few months. But remember, some of these companies are going to have huge beats because expectations are so low. EPS's will probably miss more often than not because companies most likely haven't been doing as many stock buybacks (the one cool trick all bears hate) because everyone's in cash save mode. But things like revenue and profit are probably going to crush it. I think the canary in the coal mine will be forward guidance. A lot of these companies pulled guidance when the pandemic hit, and investors (big money) want to know what they're getting into with their money in an uncertain time. They want confidence. Now, this will be the case with some, but not all. Just keep it in mind.
We also saw some other stuff that was fiction to talk about even 6 months ago. Amazon at $3000 and TSLA at almost $1400. AMZN and TSLA investors need to send Jpow a nice fruit basket right this instance. That's insane.
Technically we did break out. We broke out of our range, and defending the line to validate it by EOD. Again, this is on horrible volume which means no institutional participation which is suspect to me. As long as we're above $315.54 we're bullish. Full stop. The percentage gains tell that story with majority of market sectors in the green. But the charts tell different stories.
But again, VIX was elevated today on a breakout which is telling to say the least. We also had RTY faded from almost a 3% gain to only a .72% gain by end of the cash session. That's not a good sentiment. The only bullish sentiment i see is over in the land of QQQ with the giants. But again, like i've said with bonds being essentially being at 0 real yield i feel like these tech stocks are the new haven trade. This is where investors are parking money to be "safe". What could go wrong?
5m showing the gap up and then the ISM taking the wind out of the bull's sails for some reason even if it was a beat. Which was odd. And then we literally just floated, above the breakout area with the bulls doing their best to keep it there. They did seem to be on their heals majority of the day. We did have the obligatory window dressing close. Trying to make it look like the market wasn't just completely dead the entire day to try and enthuse the masses
Hourly showing a breakout... And not much more than that besides consolidation. But again we did fill the gap. That new horizontal ray is the top of the range we had the past few weeks. Notice how they defended it?
Daily showing the same, with a breakout and a retest of the breakout area (notice how the daily looks as opposed to the shorter TF's? Window dressing). Volume was at 60m. The second the least amount since the pandemic. That's not indicative to a breakout. This is exactly what i mean by volume being a further confirmation of a move, and this isn't it
SPX showing a little bit different with barely clearing its' resistance level and having to trade away (up) from it and doing the same as SPY
Daily looks a lot different doesn't it? It's so clean. Remember how i feel about clean technicals? This a breakout from a triangle also with an almost textbook gap up breakout from a resistance area, but also missing the gap
After Friday trade on futures this is what printed, and it played out
Measured target is $3234
I mean look at this operation. That last umph candle was at 12:30 EST time before it just went sideways
Consolidation looks ugly though
IWM with a rejection AGAIN from it's resistance level and a trade down below it's next what should have been support level, weakness. Trying to ride that 200 period MA while it prints what looks like another bear flag (haha)
This is just ugly. It reminds me of someone pulling like a child or a dog on a leash that doesn't want to come with
The last three trading days have been gap ups that get faded. Still can't close above it's .236 fib
VIX spiking through it's 200 period MA again and printing a bullish hammer.. Also closing above support, and within the body of Thursday's close.
DJI on the other hand actually trading into, and holding it's trendline it's tried to regain the past week. Divergence from IWM. That's bullish for DJI
Just realized it has a daily close above it's 200 period Daily MA as well. Good close for DJI
No comment. No bubble here. Just unstoppable stonks
Silver still can't get a daily close above that $18.67, if it does it's going to follow gold higher
Speaking of gold. Looking like it's above to try and move above this consolidation range, slow motion breakout..
Bonds actually just closed a lot more bullish (bearish for equities) than i thought they would (going hand in hand with VIX here). Spiking below it's moving averages, and recovering to close about 139 which i see as a pretty important pivot point. Was printing a bearish engulfing earlier in the day
But going against that grain, and printing a clear break down from a clear bear pennant, the dollar
In short we did have a technical breakout, but it's yet to be confirmed with institutional participation. Now, it could have been everyone was still on vacay or something today and the real action starts tomorow. But, as it shows right now we're still on shaky ground.
If we stay above $315.54 the upward targets are the gap at $319 and then 324.12/THE most recent top, and after that the gap at $333. Anything beyond that is indian country. Measured target from the ES bull flag is $3234.
Will update with downward targets if we break back down into the zone overnight or tomorrow.
As always keep your head on a swivel and happy trading.
This is not trading advice. This is my own personal opinion based on my own personal TA. You are responsible for your own trades.
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Alright small rejection from when they tried to take us higher last night. We're still above trend (yearly megaphone pattern) so the first hour will tell.
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We're going to open right below the lows of yesterday. It's either we open and the algos and bulls reset us right to where we were yesterday or we reject further down into the range.
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IWM leading to the downside
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DJI knifed directly through it's trendline
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SPY undecided. Anything below $315.14 we're headed lower, anything above $315.52 we're going or treading water higher
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Gap at $316.99. We'll see if they can fill it.
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Tug of war though. We're not going anywhere lower as long as NDX is going higher.
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Gap filled. Let's see if they can hold it.
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First hourly close goes to the bulls. They have the ball.
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If they do end up breaking this range next target is the last gap fill from the island reversal at $319 and some change.
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IWM with a gap fill and currently trading away from it.
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On a small TF so it may get washed out but RSI divergence with rising wedge. Measured target would be today's open.
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Hopefully by end of day today we'll have picked a direction. This sideways shit is always so boring.
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Almost on cue - Volume picked up to the downside. Up to the bulls to defend the breakout area or else we go back into our sarcophagus we just escaped from.
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4 out of the 5 largest volume 5m candles today have all been downwards. Line in the sand for the bulls is $315.14.
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Measured target hit.
Also keep your eye on the bearish divergences we've built since last week.
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DJI has broken it's intraday lows
IWM hasn't yet
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Second consecutive 5m close under $315.14..
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That's a 15m close beneath. The biggie will be this coming hourly close. They will fight for it.
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IWM broke intra day low and now breaking long term support
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Bogey for SPX is 3152. Hasn't even broken opening low from yesterday
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Oh boy. Close should be interesting.
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SPX still fighting it's open from yesterday. That's the last domino to fall
just found out you do intra day updates here, thanks! yea the market is looking like 6/10 and 6/11 all over again. although the low volume up and down this week is a big odd
@merkd1904, think this could also be another fake out before a leg higher to fill gap at spy 318? never put anything past the 5 guys in the room. but these past several days have been overly bullish. may see 308 tomorrow
merkd1904
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@stockmarket2020, Look at 06/10. That's exactly what happened. The question is which one is the fake out. Which will be the name of today's post haha.
joeychaps1231
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really appreciate the updates!
MichaelBilenkis
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As usual, great work. Did you surf the wave sideways today?
merkd1904
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@MichaelBilenkis i didn’t actually. I haven’t even gotten stopped out of my puts i opened Thursday and somehow still got out at a small profit on some credit spreads i opened as well thankfully.
Haha the moment futures opened yesterday already that many points up, I thought "just as he said, it's gonna gap over.. but then likely drag its shitty ass across the carpet like a dog with worms because there's likely no follow through yet" aside from of course the mighty NDX/QQQ. Crazy. Where it stops nobody knows. It's looking like a thought bubble with all those crazy exponential gaps