This Looks Like A Topping Pattern
The S&P futures (ESZ19:CME) closed on Thursday at 3097.00, 9 points above its 8:30 CT opening print of 3088.50, after closing Wednesday at 3095.50. Its trading range (3081.75 – 3098.25) was slightly less than its previous day, and again failing to set a new intraday high. This is a classic topping pattern, but have faith all ye traders out there, today offers an expiration Friday experience.
Just before 2:30 CT, as the MiM was showing small to sell, the ES pulled back to the 3092 area before trading up to a new daily high at 3096.75. When the MiM reveal flipped from $147 million to sell to $418 to buy, the futures popped up to another new high at 3097.25. They would go on to print 3096.50 on the 3:00 cash close, then trade up to yet another new high at 3098.25, before settling the day at 3097.25 on the 3:15 futures close, up +1.00 handles, or up +0.03% on the day.
In terms of the days overall tone, the ES acted weak in the early goings, and traded firm for the remainder of the day. In terms of the days trade; when you take out the 215,000 contracts traded on Globex, only 825,000 contracts traded during the day session.
Be Cautious Today
Folks, I can’t make this stuff up. For several days the almighty technicians have preached a run above 3100 or a decline below 3080. With expiration Friday on tap, you could see both sides of that equation, and more. Better to discuss how “sideways” actions often times replace what corrections provide. That is about the only thing on my radar that doesn’t correlate with my belief that the markets are pretty much done going higher. Be careful today, retail sales and expiration Friday lurk.
The Dollar
Is that another interim Dollar top we see forming? Did the GDP numbers out of Europe, in particular Germany, give us the last buying opportunity we will see on the Euro (6E 12-19) for a while? We think so.
Got a little greedy with our buy limit order yesterday, and missed adding on to our existing three longs, but that’s OK. We shorted a couple Dollar contracts (DX 12-19) at 98.250 for the start of what we think is a run back down to the lows of recent months. It has to happen.
Want to be a manufacturing country; make sure your currency is protected right. That works for the agriculture industry as well; they manufacture food.
There is a world outside of the ES. Interested in learning? Send me an email at david@amstradinggroup.com and we’ll get you on board.
Natural Gas
The “Widow Maker” keeps trading its usual patter before they come out saying this is the “coldest winter” ever. It’s coming; be patient and remember to thank our dear friends north of the border when it hits.
It would be nice if Europe and China would step up and sign some long-term LNG contracts. We’ve been hearing about them for years. There are enough transmission facilities operating reduce the natural gas glut that exists in the United States ,but not enough to dramatically move the price.
OK, the office is set up well enough that I can work from my bed. That’s a good thing. We hope to be live on TradeChat by November 25, so keep watching. We’ll be running “free” until I’ve figured out how to use everything correctly. By the middle of December, we’ll have it all figured out, I hope.
Keep emailing me at david@amstradinggroup.com and let me know what you want me to highlight and teach. In the interim, thanks for reading what we post. Enjoy your trading.
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As always, please use protective buy and sell stops when trading futures and options.
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