11/14/2015 Weekend Update

[Unique]

See blog for better format: http://aapltechnicals.blogspot.ca/

ES Weekend Update: Keep It Simple Stupid Series – The Bear Train’s Easy Money Part 1
Friday’s session was just a straight continuation of Thursday’s daily breakdown bar. It was the same accelerated 1HR 8EMA bear train for swing and 15m 8EMA+20EMA short re-entries train for scalpers. Overall, Thursday and Friday were perfect textbook trend days.
A quick recap of what occurred this past week and take the previous weekend update into context:
• Monday closed below daily 8EMA for the first time in 28~ sessions.
• Tuesday inside bar closed below 50% of Monday’s range and still below 8EMA
• Wednesday lower high rejection bar along with a bear sandwich setup
• Thursday morning at 9AM broke below Monday’s low and confirmed the daily extreme overbought signal that targets initial 25-30 points immediate down that could turn into more. Closed below daily 20EMA and 200SMA
• Friday was a breakdown follow through day. In the morning, the major support of 2034 was tested and bulls couldn’t even manage a bounce. This indicated that bears are serious and price momentum was very bearish still and closed at the lows. Daily 50SMA = 2000.4
From last weekend’s update:
Remember, this is a bull train until price proves otherwise. We’ve been mentioning this for weeks now, but price is king and everything else is just noise.
What’s next?
Daily closed at 2013, this is the 5th consecutive session closing below the daily 8EMA. This is the first session closing below the 2026 daily 100SMA and major support of 2034. The next major moving average support resides at 2000.4 which is the daily 50SMA.
Remember, this is a bear train until price proves otherwise as daily is now below 8EMA and 20EMA. For swing bears, this means that any bounce back to 8EMA and 20EMA are going to be re-entries to short.
The immediate targets of 2035, 2027 are fulfilled along with intermediate target of 2010.
Now, the intermediate target of 2000 becomes an immediate target. However, we are expecting a possible deadcat bounce on Monday/Tuesday since price is near major support level of 2000-2007 and hourly extreme oversold signal in the works of confirmation.
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The Daily Extreme Overbought Signal
The initial target of 25-30 has been fulfilled from that 2062 breakdown trigger. 2062 to 2011.5 is 50.50 points already.
Now, the important question is that are we going to get a Leg 2 down on the daily chart?
We are going to assume that there’s a deadcat bounce on Monday/Tuesday due to the price nearing major support levels of 2000 and 2007 along with hourly extreme oversold signal waiting for a confirmation. Then, we would see if the market forms a lower high/other bear setup for the Leg 2 down. Currently, we are treating the 2110.25 to 2011.50 low as leg 1 of the daily bear train.
Taking into context of the past 14 months
Market has been in a trading range of 1813 vs 2134 for the past 14 months and that is 321 points. Inside those 14 months, 6 months were spent inside 100 points range of 2134 vs 2034 from March to August. Recall, we warned about the fast and furious breakout/breakdown at the end of July before we went on vacation. Then, when August 20 closed below the 2034 range low of the past 6 months, it triggered the MASSIVE feedback loop of bulls being stopped out and bears chasing the train as it were a 6 months’ worth of accumulation and consolidation range.
How is this relevant? Well, since the market has been in a range bound market for the past 14 months and it just hit a range bound high of 2110.25 that was rejected by almost 100 points down. The market now has potential on the weekly and monthly charts to revisit that range low in the longer term perspective if we get that Leg 2 bear extension from the daily chart setup. This means that from now to the end of November, bears have to really prove themselves.
Weekly chart perspective:

• Large Weekly perfect bear bar closing at the lows and below 8EMA and 20EMA
• One week erased the prior 3 weeks gains. There's a lot of trapped bulls from the prior 3 weeks’ worth of accumulation, which means it creates a large feedback loop of them getting stopped out if breaks below 2007 and 2000.
• Question is straight continuation down or inside bar/consolidation bar first then bears try for the follow through during the first week of December?

Monthly chart perspective:
• There’s 11 sessions left (really 9 sessions since Thanksgiving is going to be early close and light volume) for monthly bears to try for a bearish engulfing which means closing ideally below 1883 or around 2000.
• Currently, monthly 20EMA = 1972.72. Friday closed below 8EMA 2021.86.
General thoughts and potential roadmap planning:
Since we are expecting a deadcat bounce to occur on Monday/Tuesday by sticksaving in the 2000-2007 area, the bears have to reject the bounces at daily 8EMA and 20EMA in order to keep this bear train running into a potential Leg 2 down. Obviously, all bets are off if daily closes below 2000 as the next major support is at 1982, then 1951.
If bear train is so strong that bulls can’t even manage to retest daily 8EMA/20EMA, then hourly 50SMA and 100SMA are going to be key rejection levels for the deadcat bounce.
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FWIW, we are still holding 25% swing shorts from 2064.25 entry as a trailing winner in the swing futures account. Waiting to see how we open on Sunday in about 5.5 hours.

[nikman]

RSI(3) above 30 for 25 days:

What is MAE?

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[Junior Buffett]

Paris Friday 13th:

I'll leave aside my disgust for those who commit atrocities. Here I focus on SPX reaction to terrorist attacks.

On the short term US equity markets seem to be quite immune to these incidents. The 2004/2005 bombings in Madrid and London didn't have a real impact on SPX. Even after 9/11 the US market was not hurt medium term. SPX was back up to the prior level after 20 trading days and was strong for the next few months - thanks to Alan Greenspan's liquidity injection

Recent history suggests that the Paris attacks won't have a significant impact on the US market.

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I second your view.Infact, I think market will rebound strongly in response of terrorist attack to show that solidarity and to send them signal that we can not be defeated by your actions..we will win this war against you..prepare for big green bar on Monday!!

[AndrasGy]

RSI(3) above 30 for 25 days:

What is MAE?

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Maximum Adverse Excursion

[gappy]

10 minute Heikin-Ashi. Not a great start.

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Pre-Tokyo open pump will tell. Vote Cobra. glta

[fehro]

way way too early… but for ubër bears.. yet another possible H&S yellow.. tagging the 50d overnight.. Tradingview's SPX500 ~/ES like - ish… D/60m