The S&P 500 futures (ESZ19:CME) closed at 3075.75 Monday (a new record high), just a few handles lower from its 8:30 CT opening print at 3081.50, and towards the higher end of its trading range (3064.75 – 3083.75). Yesterday’s narrow range is something that concerns technicians. Remember a few articles past; 3% is the average increase over a millennial mark. A lower close with an expanding range, coupled with increasing volume, could send the ES down in a hurry.

The world still revolves around China, and that is troublesome, not that it’s China, but that it is a singular “issue” that everyone’s concerned about. Remember, this market has fallen dramatically when someone says there’s a problem. So, take heed of the miniscule trading ranges, rallies above opening prints that do not hold, and take care. The charts we look at suggest additional gains could be hard to achieve.

Currency Trend Is Shifting

We added a few short Dollar contracts today on the rally. The trend for currencies gaining ground against the Dollar has just begun. Currency cycles, at least in days gone by when interest rates were “real”, lasted between five 5½ to 6½ years. The effect of the real world provides the opportunity to trade these moves. We don’t trade; rather, we add on to winning trades when the opportunity arises.

Natural Gas Update

How about that natural gas trade? It’s only six days old and up more than 20%. Go ahead, trade the ES, go blind doing it. China had its effect today; cold weather is coming, and any disruption in the supply chain (pipeline, storage or otherwise) could skyrocket the “widow maker,” but remember, the opposite can happen equally as well. We haven’t added to this position, but with a successful test of the 2.72 area, we most likely will.

Leo and I are in Yakima, Washington tonight. Lots of mountains around here, and the cars and trucks go much faster than on Vancouver Island. Keep emailing me at david@amstrdinggroup.com and let me know what you want to hear about. 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.

Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

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