Charts September 5th 2015

Some wild moves the week before last, a lot calmer this week creating some nice trading opportunities.

Next Thursday is the E-mini Contract roll http://www.cmegroup.com/trading/equity-index/rolldates.html. This is typically a difficult week to trade. As I have been saying I expect more selling into this as is normal when participants sell the expiring month and buy the following contract.

I see some similarities between Equity and Fixed income charts below in terms of their position relative to recent large volume ranges. However, Fixed income spiked up during last weeks panic, retested lower and eventually rallied after ECB/NFP.

Equities are waiting for direction – mean reversion or more downside. Selling is relentless on any half decent bounce. Investors are cashing out in the face of a large number of uncertain factors in Asia and emerging markets.

NEW YORK, Aug 27 Investors in U.S.-based funds
pulled $17.8 billion out of stock funds in the week ended Aug.
26 after a plunge in stock markets spurred a flight to funds
that hold safer assets, data from Thomson Reuters’ Lipper
service showed on Thursday.

The outflows from stock funds were the biggest since
mid-December of last year. Funds that specialize in U.S. shares
bled $11.7 billion to mark their biggest withdrawals since early
May, while funds that specialize in foreign shares posted $6.1
billion in outflows to mark their biggest outflows since Jan.
2008.

http://www.reuters.com/article/2015/08/27/investment-mutualfunds-lipper-idUSL1N1122N620150827

DAX:

Price chopping around above “pre ECB QE” trading range. My guess is that many are waiting to see if the ECB comes through on its promise to buy more.

10000 / 10200-300 area is my over/under for direction.

Weekly chart – reduced volume and range.

DAX_Weekly

Dipped below 10000 on Friday – bounces at end of day on Thurs after ECB and Fri after NFP got sold into.

DAX_longterm

ES:

30 Minute RTH Chart including HVN areas from October 2014. Only 2 of the last 10 days had positive delta at the close. The area of poor structure came into play on Wed/Thurs but price fell through it again. Going to use 1930/40 area as over/under line.

main_2013_atr

24 hour chart has slightly different levels to RTH chart.

I think 1970 may be significant as anyone who bought this year and is bench marked on an annualised basis is negative on all share purchases. As long as price under there it creates an overhead supply when price returns there with people electing to get out of some positions near break-even.

1939 HVN area stands out on the right hand side histogram of the following chart, as does 1968 and 1828.

es_composite_long_term_plain

It could potentially also have repair trade between 1900/1970 but the more time spent in the bottom of the range the more likely is going to be a retest of last weeks lows. There were a couple of end of day squeezes (Wed/Fri) but they got sold.

The COT chart showed leveraged money getting heavily short the market on week ending Tuesday 1st Sep.

ES

NQ:

NQ

US Dollar Index:

DXY

EUR:

Some leveraged money exiting short Euro position.

EUR

US Ten Year:

Leveraged money sligthly short ZN. Commercials pushing long.

ZN

127 area important

USTY

Bund: 4 days of high volume between 1.53/1.55 and sellers absorbed and squeezed – still watching 1.56 for clues. (I don’t trade fixed income but I watch it).

BUND_LongTerm

Gold, commercials are getting short into any strength.

GC

Keeping up with this type of thing is also Vital.

COAVMUkWcAEpqBq

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