Monday, November 27, 2017

SPX Update

I hope everyone had a pleasant Thanksgiving.  Personally, I gave thanks for the wonderful near-term mess in SPX, because if there's anything I love, it's an untradeable mess.

As you may have gathered, the above sarcasm means that there's no real change in SPX.  Lately it seems the market only rallies when it's closed (via futures), which is the same thing it did around (though after) Thanksgiving 2011.  This is actually something it's does periodically, and I have mentioned it a few times in the past, mainly because it always feels like "cheating" to me.  The leverage in the ES futures market allows one to push the market around at a fraction of the total market cap of the cash market -- so one firm all by itself can (and sometimes does) push futures to wherever they want them for the cash open.

But that's the nature of the game, so it does no good lamenting such things.  It is what it is.

Anyway, no news that's fit to print on SPX.  While the pattern was clear for a good 6 weeks or so (wherein I kept repeating "higher prices still to come"), it's currently a bit muddled, and may remain so for the very near-term.

One thing worth noting is that the 24 hour SPX chart, which contains the action of the futures market, does have the look of an ending diagonal or bull nest.  If we see a quick overthrow of the upper trend line of the blue diagonal, followed by a solid whipsaw, we could see a near-term decline follow.  Conversely, if we break out the diagonal and begin to run, then we could put in a solid upside move (as this would suggest a bull nest). 

It's also possible that the diagonal (if that's what it is) has already completed -- if the black trend line is the upper boundary; in which case watch for a breakdown at the lower trend line.

Something to be aware of anyway:

In conclusion, there's no real change from the prior update, but we do have a near-term pattern that may be worth keeping an eye on.  Trade safe.

No comments:

Post a Comment