Q1 – what a ride it was!
Looking at the ES weekly,
….it has been nothing but relentless price momentum upside with the casual pullback on a daily chart. Permabears have been littering the twitter waves for months now waving their “bubble” flags in hopes that the day will be sooner rather than later that they told you so. The count is endless in the number of technical signals that have been broadcasted that have simply been run over and right through as we have pushed the limits of the market. Overvaluations, overbought and the next big short; all common terms to make the headlines in hopes that they were the ones that called it first. Even to the extremes that WWIII is brewing, which by the signs given (by this well respected and noted money manager) may lead us there in due time based on their analysis of world events.
Meanwhile, my IJR and TQQQ holdings continue to reap the benefits of this momentum move based on Jason Kelly’s quarter re-balancing. Had I listened to any of the naysayers starting back in 2014, I would have missed on the gains I have attributed over the market’s rally, illogical as it may be to you. I keep it simple Jedi traders and while the IBD has solid research behind their fundamentally strong stocks, I don’t have the need to chase the next IPO or individual company that will become the next “FANG” stock. The hopes of a deeper pullback would have been well timed to close out open gaps that I have mentioned in my previous weekly outlooks, and the prospect of buying more into this rally instead of having to sell off to re-balance in the coming month have yet to be seen. Either way, one fact is for sure and will be rehashed for years to come, the rally that went against all the rules is in the books.
With week 11 closing out the quarter with the FOMC announcement, the indices futures continue to remain upside in what continues to be an ongoing uptrend holding above each indices perspective 50/144 ema and key moving averages (10, 50, 200) on higher time frames. After the price action push to all time highs as seen in the chart below,
it was only the NQ able to return back upside
as the ES
and YM failed at regaining to its’ highs.
Is this perhaps a technical concern that the rally may be waning or just consolidation on the lower time frames until the next push higher back to the all time highs?
Looking ahead to week 12 as seen here in my weekly video outlook, VIX levels continue to remain low as technical indicators by my charts have just enough reason to go in either direction. I know that is not what you want to hear, but consolidation is exactly that. Key events in the market this week include Federal reserve speakers which can surely move the market on any given day. Don’t rule out Washington politics and worldly imbalance to set the market in motion which by any other given year may be not be as newsworthy but seem to be playing a bigger role in 2017.
Watch those daily/weekly and monthly VWAP for support and resistance both intraday and the higher time frames.
Watch for any pullbacks to the open gaps on the YM or ES. If the daily lows continue to be bought and lifted, TREND will remain upside and may retest the perspective all time highs.
Technical momentum probability REMAINS at this point to hold at the highs on the indices on the bigger pic in my opinion if all things remain constant and nothing occurs to “shake things up” downside. It won’t take much these days! Continue to monitor for the break of the daily 10ma downside or revisiting the all time highs in the opposite direction. Early signs of market weakness has started to show in week 11.
Observe the intraday on the 60/15m charts for any alert of the change in trend or continued movement upside. I will continue notify through social media and my daily outlook; posted 15 minutes prior to the US open of any updates throughout the week.
For the Indices ETF or long term holder, different rules may apply as quarterly re-balancing which is approaching and is my preference for managing such markets. Option to move trailing stops to key MML, Fibonacci or moving average levels can lock in more profit if and when a pullback may occur. Placing a 250 sma/VWAP on your daily/longer term range charts can be one useful indicator before institutional support and taking in more profit.
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.
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