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Esa

Chart of the day: Make it or break for the $NQAThis is a follow-up from the Bounce Zone series of charts where I highlighted equity indices were at key support levels. After of a week oscillation, the $ESA and $NQA have formed a potential Gartley formation. What is a Gartley formation? A Gartley is a bullish reversal pattern which is found after severe declines, characterized by short-term double tops and not breaching the last low. If this is indeed a Gartley, the upside target is around the 9185 region. Now, personally I think the Americans do not know what they don't know about the potential economic impact of the CoronaVirus. Since on Fridays we usually get short covering, therefore the Gartley may not be a Gartley after all. The NQA just made a lower low and the ABCD projection is around the 7400 region; which coincide with a Weekly SSR and long-term trend support (Link up all the troughs from 2010 to today and you'll see the long-term trend support). Both outcomes are within the realm of possibilities and I would rather let Mr Market tell me which direction he wants to take.
CME_MINI:NQ1!
by WellTrainedMonkey
$ESA: Similar set up to 4Q-18The current technical picture for the $ESA is very similar to that in 4Q-18 and is essentially a pennant formation in the making. A pennant formation is essentially a continuation pattern and the measured objective for a breakdown is 2680. Economically speaking, the US is not an economically isolated island and the PMI slipping below 50 to 49.9 should be viewed in the context of the EU and Chinese PMI which had weakened to sub-50 a few months earlier. The slowdown in US/global corporate durable goods will only accelerate as the trade war intensify and drags on. I reiterate the fact that the Chinese wants to negotiate as an equal sovereign state when Trump is negotiating based off an egoistical basis is a major hurdle to a trade deal. The main risk now is Trump doubling and tripling on crazy.
CME_MINI:ES1!Short
by WellTrainedMonkey
$ESA: Reality is calling...Reversal at top of wedgePowell did the best he could, but it was always going to be lose-lose proposition for the July rate cut. With no Fed cow bells and almost zero chance of a trade deal, the negative cycle is catching up with the $ESA. I have posted in recent days on how the FANGs and chip stocks are breaking down, why continue to pay top dollar in the belief that the $ESA will continue to defy the negative earnings cycle??? We do have trend line and SSR support levels to work through before calling for a breakdown but the writing is on the wall. Upward sloping wedges almost always break downwards.
CME_MINI:ES1!Short
by WellTrainedMonkey
Chart of the Day: $TYA hits ABCD target $TYA hits an ABCD price objective in spectacular fashion as Trump enlarges the trade war to include Mexico. Not sure what would cause a sell-off in bonds, but the fact the $TYA hit the ABCD target in such an explosive manner as we head into the last trading day of the month and new SSRs being set, makes me do a double and want to take money off the table. Looking across to equities which have been selling off for a month and $ESA recently breached the crucial 2800 level together with the SOX trading at a key congestion zone, I would not be surprised to seem some near-term strength in equities and weakness in $TYA.
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by WellTrainedMonkey
Chart of the day: 2800 key support level for ESAOver the last 18 months, the 2800 level has been a consistent significant support/resistance level for the ESA. With China making its retaliatory moves yesterday, we are probably at peak negativity with regards to the trade war until the run-up to the Trump-Xi meeting in end June. Please note, I do not think this is a BTFD moment, it is more of a watch for the consolidation and fade the rallies type situation. For more information on how to use the SSR levels, please search for Relative Force Significant Support and Resistance under Scripts.
CME_MINI:ES1!
by WellTrainedMonkey
JPM: ABCD Completion with upside target to $121.60Couple of harmonic completion in JPM:- #1 The Feb to Mar butterfly formation which resulted in... #2 An extended ABCD down move to 106. #3 Price reversal with heavy volume on the 138.2% extension of the #2 ABCD which... #4 Happens to be the 78.6% retracement level (higher low) from the 6 Feb low. All these leads me to think JPM is about to make a move up to try a new high at $121.60, c.+9% upside. This is earnings season, all the volatility in global markets should = great trading results for JPM & fellow banks = pop in share price = Feds raise rates = +ve feedback loop on banks' share price. If you have not closed your shorts since my last post on the ESA, it's still not too late to do so.
NYSE:JPMLong
by WellTrainedMonkey
ESA: Volatility Coil & PuppetsMarkets are dynamic and I like to revisit my assumptions to search for the null hypothesis. The last time I posted on the ESA, I was looking for a CD leg up for a potential upside to c.2800. While the call has partially worked, I think it is time to update and revisit. The recent price action in the ESA suggests a volatility coil is building up; it is best described as a wedge formation which has 50:50 odds of an upside/downside break. When it does break, it will spring forth like a coiled spring. Hence, its name "Volatility Coil". So 2 scenarios at play here: 1) ESA breaks upward to form a CD leg (xABCD pattern) off the back of strong corporate earnings for a upside potential of 2800. To me, the forward guidance would be more interesting considering the tax bill is stuck in legislative limo, there is the threat of trade war, a threat by the Donald to rescind the spending bill he just approved, but the market likes to extrapolate history and 1Q earnings should give the bulls some juice to push the market higher. 2) ESA breaks down to form a continuation CD leg (ABCD pattern) for a downside potential of c.2400 on what I am calling the "Puppet goes nuts" theory. Maybe the Russian collusion is more of an operation to influence the Donald via the use of influencers? With the Donald increasingly besieged and the influencers constrained, he might be compelled out to lash out at the perceived puppet master to reinforce the perception of innocence. Hence the move to strike Syria and risk an escalation with Russia in addition to piling on Russian sanctions. In this event, the Donald becomes more unpredictable, unstable and crosses a Russian red line. Or 1Q earnings could just suck. The point is, markets have not discounted the threat of geopolitical risks for too long; With the Donald increasingly behaving like a Disney duck and likely a lame duck by 2019 if the Dems wins the house, the higher the likelihood of an unforced policy error. My inclination would be to derisk and use the heightened vols to build optionality in both directions.
CME_MINI:ES1!
by WellTrainedMonkey
ESA: Potential CD leg forming for +9% This is further to my earlier post on ESA: Make or break it. Since then the ESA has broken down from the continuation wedge and appears to have found support on the 200-DMA which coincides with a 78.6% retracement. Given the heavy data dump coming out this week and the US heading in earnings season, I would play it on the safe side to close shorts and look for spec longs. My view is also colored by the fact that the Stoxx 50 and Stoxx 600 are also sitting on trend line support as with some of the major tech names which I have highlighted as potential shorts. The 1Q data dump and earnings should be relatively strong given the underlying economy is doing well and the recent protectionist actions taken by the Donald will take time to flow through the hard data. Do note, this is a tactical call. The overall set-up is still negative as previously mentioned, the mismanagement from the Donald WILL eventually flow into the data and of course, an xABCD pattern which I am describing here is a reversal pattern.
CME_MINI:ES1!
by WellTrainedMonkey