The S&P futures (ESZ19:CME) closed on Thursday at 3103.54, five points below its opening print of 3108.49, after closing Wednesday at 3108.46. Its trading range (3094.55 – 3110.11) remained within the boundaries of its prior day’s range. With a close below the prior day’s close as well as its opening print, old school techies will tell you, the party is over.
We remain short three contracts at an average price of 3126.66. Sellers will more than likely come in at or below the highs of today. Question remains as to whether the 3090 level will hold. Time will tell, but with Thanksgiving week upon us, chances are it will not.
There was nothing special to today’s trading other than what is written above. These are very strong technical indicators that unfortunately get lost in today’s trading world. Fifty years of predicting moves with technicals like this serve a purpose; it helps us understand how important experience is.
In essence, today the markets resumed their directionless trading trend albeit at lower levels. There are problems on the horizon and these problems are starting to take their toll on the indices.
Interest Rates
The 10-year note (ZN 12-19) decided that perhaps the Fed was right today. All that means is “watch the bouncing ball”. Understand however that the ball is not going to bounce all that high or low especially with Thanksgiving on the horizon. It is going to be so boring that we’re taking next Friday off to pick up some bargains the old way; retail stores. ZN I going to be range bound for the foreseeable future. Changes to interest rate fluctuations in the US will depend upon what happens in Europe. Lots going on across the pond tomorrow so take some time to watch what comes out of the several meetings and speeches.
The Euro
The Euro (6E 12-19) remains in a tight trading range just waiting for something to give it the boost it needs. That may come from Christine Lagarde one of the best to serve in her capacity worldwide ever. She gets it; currency valuations are important during periods of trade talks. After all, for a long period of time Europe looked to increase their share of world trade by depressing the value of the Euro. Those times have changed and despite Europe still needing a shot in the arm it is not going to come from lower interest rates. Hope you took the time to listen to her last night. The Dollar is heading lower folks; it has to if Trump wants to avoid recession.
Natural Gas
It’s going to be a long winter for those who think that natural gas is going higher. These charts (and longer ones we employ) suggest a test of the $1.75 level set four to five years ago. It followed a warm winter and the total amount of natural gas in production was a fraction of what it is today. Commodities are supply and demand animals. If it doesn’t get cold natural gas is heading lower.
Soybeans
We have orders in to buy ZS 01-20 at 880, 885, 890 and 895. In other words, we were patient; it’s time to take a position more than 40 points below where we first started watching for an entry. It takes patience folks; fewer trades and better targets. It’s looking like farmers planted plenty of beans; still waiting for data on that one.
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.
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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