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  1. phil

    Good morning!  

    I have to be at the Nasdaq this morning and should be back by noon and then we'll try a Webinar at 1pm, hopefully.  Bottom line is I'll barely be able to chat.  I have to get an early start as I didn't feel like sleeping in the city but I'm also worried about the morning commute with Trump in residence.  I'm sure I'm on some kind of list at this point! 

    Yet another nice pop in the Futures this morning at the EU open and they are up almost 1% – about to test 3,500 on EuroStoxx, which should get rejected from 3,400 so 20-points (weak) is 0.5% and a strong rejection would be 1%, so that then translates to expecting at least a 0.5% pullback on our own indexes from their runs.

    On the DAX I'd call it 300 points up so 60-points back from 12,300 would be 12,240 (weak) or 12,180 (strong)

    The Dow had a 400-point run (1.8%) to 22,050 so 80-points back is 21,970 and then all the way back to 21,890 but I'm only expecting a weak retrace for now.  

    Still, that's another nice $400 dip on /YM so why not play it short at 22,050?

    /ES had a 30-point run to 2,470 and that's 6-points back to 2,463 and then 2,457 if it's so inclined to fill that gap.  

    /NQ 5,940 is an air reject from 5,950 from 5,800 and, even though it's 150 points, the Nas loves those 25-point lines so we'll look for 5,925 and 5,900 and below 5,900 means the others are likely to at least do a strong retrace too.

    /TF 1,370 back to 1,400 was a narrow move (and we fell from 1,430 so it was a 50% bounce which failed at 1,400).  That was meant to retrace 6 and 12 points so 1,388 is the line to watch to see if we're really recovering and below that is a fail on the RUT.  

    In the bigger picture, 1,430 to 1,370 was a 60-point drop so 12-point bounces to 1,372 and 1,384 so that's our real zone of contention on /TF – between 1,384 and 1,388 and whichever way we break is likely to determine which way the market breaks.  And look what happens when we zoom into the 5-min chart:

    See, right where the 5% Rule predicts we'd consolidate with 1,386 the center of the triangle squeezy thingy.  

    2,470 on /ES is the easiest shorting line at the moment as it's a good place to stop out over.  

    Oil held $47.50 and this should be a good last effort to go higher before the weight of the contracts drag them down.  With 5 days to trade, there are 210,000 open so still 40,000/day to dump is still too heavy – though still a bit too crazy to play but I'd short a good spike after inventories, especially if we could hit $48.50.

    Brent is now MORE than $3 ahead of WTIC – that's a big stretch! 

    $2.80 on /NG is where I start having conviction so the entry is really a question of what you are willing to lose vs the risk of missing the next run.  Unfortunately, a 0.10 drop is $1,000 per contract, so it's not nothing but around $2.85 I feel compelled to begin scaling in. 

    Behold the full faith and credit of the United States (despite the Fed doveishness):

    /KC had a nice dip.  There's no evidence that this line ($135) has support yet.  It was the prior breakout so the 10-point dip should get a 2-point bounce ($137) at least but then we'll see if we get to $139.  The Dollar is not likely to help so it will be a good indicator of Coffee's real strength.  

    Can't get motivated to play /SI or /YG with the Dollar on the rise.  Copper ripped higher on tariff talk:

     





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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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