Market indices, making new highs once again in week 30 as the YM rips to the upside on Day 4, Thursday as the remaining indices pull back to close out the week. Downside proximate open daily gaps were closed as the ES just falls below the 10ema and regains above, and at the MML highs as the weekly Doji/Indecision Heikin Ashi bar.
BIG PICTURE – What’s Ahead?
VIX levels dipping to numbers not seen since I’ve been trading into the sub 9’s gave a bounce back to close above 10. The RTY hitting my magic number of 10K volume surpassed 20K on Thursday’s price action. Well into earnings season and the major FANG/FAAMG numbers already out without much disappointment, leaves the big one in the bag, APPL in week 31.
Technically by the charts, with open gaps now closed out in week 30, any deeper downside will have quite a drop to close out the next level down on the YM, as the ES/NQ are concerned, nothing we couldn’t take care of in one weeks price action if we lose support off the moving averages.
The trailing 50 period moving average will be the first level of support on the indices. As long as price action holds above the 10ema, short term 10ema for support and MML levels upside on the higher time frames to manage the trade. If we break these levels, open gaps will be in play downside.
Keep your eyes on the small caps as they are holding at the lows of week 30 and at the opposite end, the YM at the highs.
Summertime price action as we lead into August surely not playing out as the norm which is ok. Keep it simple and watch the charts and leave the bias out of where the market should be. Best defense is a trailing stop on the longer time frames above your entry and far enough back to give the market some room to chop as the DIP buyers seem to be the only TREND holding up this market. Intraday, just simply wait for the setup whatever that may be and stick to your plan.
As always be ready for both directions in the unpredictable market.
Key events in the market this week are earnings, ADP and Non-Farm Payroll.
Technical momentum probabilityREMAINS in a UPTREND on the bigger pic as we hold above the key moving averages. As always, BEWARE of the catalyst wrench (Washington Politics) that looms overhead of if and when the market may sell off in reaction to unsettling news.
Waiting for the APPL earnings and NFP may be the highlight of the week aside from Washington indecision makers. The VIX which remains content at these levels and price action holding at or above the 10ema, will keep this market in an uptrend momentum. It is the catalyst which we monitor for weekly that will flush the market at any given chance. It appears the Russia/Chinese/North Korean tension may be enough to do just that.
The case for higher highs is just as strong and whether you trade the intraday futures or indices ETF’s, momentum clearly resting on the uptrend is a much stronger play.
Swing ETF positions should be careful about chasing at the highs as pullbacks are always opportune times to re-enter the trend as the SPY and QQQ were opportune in week 29.
I will notify through social media and my daily outlook; posted 30 minutes prior to the US open of any updates throughout the week.
Attempting to determine which way a market will go on any given day is merely a guess in which some will get it right and some will get it wrong. Being prepared in either direction intraday for the strongest probable trend is by plotting your longer term charts and utilizing an indicator of choice on the lower time frame to identify the setup and remaining in the trade that much longer. Any chart posted here is merely a snapshot of current technical momentum and not indicative of where price may lead forward.
Thanks for reading and remember to always use a stop at/around key technical trend levels.
The author trades futures intraday and may have a position in the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.