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An Autopsy of Lowest Selling Pressure EVER: S&P 500, NASDAQ 100 and DJIA Futures DataViz

Courtesy of ZeroHedge. View original post here.

E-mini S&P 500 Futures (ES)

Based on candlestick wick analysis and data across all three primary US futures contracts, there is less selling pressure than ever before.

Not since xyz, not since insert year here… there is less selling pressure than ever.  But everything's awesome, right?  Just BTFD, right?

If 'real technical analysis' was stranded on a desert island with only one wish: #RealTA would ask for candlesticks.  And currently there is a complete and utter lack of top wicks – more so than ever before in the history of ES, YM, and NQ futures. The relentless rally of the past 75 trading sessions has resulted in the lowest 50-day, 100-day, 200-day, and 500-day totals of bottom wicks since ES futures began trading. 

So, while volatility and average true range have been missing (read as: kidnapped), so has any semblance of selling pressure; and the top wicks that indicate it.

Aside from an unexpected flash crash type scenario, futures are unlikely to plot a long-term or short-term top without indication of waning buying pressure and/or intensified selling pressure.  At some point in the central bank liquidity orgy flow induced future, all this buying pressure will exhaust itself and we will likely see evidence of an actionable top – in the form of increased frequency and size of top wicks – indicating that selling pressure has arrived (read as: awoken from a morphene overdose induced coma) and that equity 'markets' are finally ready to chill.

fibozachi es daily wick comparison

fibozachi es weekly wick comparison

Here is another astonishing datavizualization of market structure and ES volume, courtesty of dataviz legend @nanexllc… starting at 11am during the 12/01 session, S&P 500 futures registered record-breaking volume as it traded more contracts during that hour than any other since at least 2005. 

The hour beginning at 11am last Friday had the highest $Volume traded in S&P500 futures since at least 2005. 2nd highest was flash crash. $ES_F pic.twitter.com/m9MikNo4H6

— Eric Scott Hunsader (@nanexllc) December 4, 2017

Is today’s session a bearish omen of an impending correction? 

While it’s possible from a technical perspective, fishing for a top on the same day new highs are made is rarely a wise idea.  That said, today’s session left us with an interesting trio of bearish candlesticks that are each noteworthy in their own way.

E-mini NASDAQ-100 Futures (NQ)

The NASDAQ 100 futures plotted a large bearish engulfing candlestick, with it’s real body engulfing that of the past two trading sessions.  We saw the saw pattern on 11/29, so today brings some confirmation for bears and the short-term outlook is now looking increasingly bearish.  If selling pressure continues, short-term downside target is initially 6,200, with strong support likely to kick in at 6,000-6,150. 

fibozachi nq daily candlestick bearish engulfing

E-mini Dow Futures (YM)

The Dow futures plotted a shooting star candlestick, meaning that:

  1. it opened higher than yesterday
  2. traded up to new highs…
  3. and then came back down to close at almost the same exact price as the open.

This was also a filled white candlestick, meaning that while it closed higher than yesterday, it also closed below the open.  When this type of candle plots after a strong rally, it’s often a warning sign that bullish momentum may be exhausted (the opposite is also true for hollow red candles after a sell-off). While additional confirmation is required, this is the type of bearish candlestick pattern that may seem obvious in retrospect when looking for signs of a market top.  If selling pressure continues, short-term downside targets are 23,600 with a strong shelf of support at 23,200. 

fibozachi ym daily candlestick pattern shooting star

E-mini S&P 500 Futures (ES)

The S&P 500 futures plotted a bearish engulfing candlestick for the first time in 4 months.  This type of pattern after such a relentless rally has an increased chance of follow-through, though in instance it may just lead to a short reset rather than a legitimate sell-off.  If selling pressure continues, short-term downside targets are 2,550 to 2,600.

fibozachi es daily candlestick bearish engulfing

Volatility Index Futures (VX)

VIX futures plotted a bullish engulfing candlestick pattern for the first time since 8/08/17.  The last instance triggered a surge that sent prices from 16.50 to 19.45 in just 3 sessions.  Today’s instance provides additional technical evidence that markets may be topping, so if VX futures continue to rally they will likely retest 13.50 before encountering strong resistance at 14.70 – 15.00 (with extremely strong resistance at 16.50).

fibozachi vx daily candlestick bullish engulfing

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Future’s have Less Selling Pressure than Ever Before… until now?


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