Assessments / Blog

ES #F Trading at crossroads with 100% Positive Sentiment?

The daily chart above shows our newly developed SUPPLY and DEMAND Dashboard and Daily Signals. The ES has been trading in a narrow range the past 3 days, with price ranges contained within the range of the previous bar (Inside bar) and we expect price to break out up or down out of these narrow ranges soon.

Also attached below a chart of a survey by University of Michigan showing 100% on opinions, that the Stock Market will increase in the next year, thus no chance of Decline? This, in our opinion, is a danger point when sentiment gets this high?

Dashboard and Signals:

The Supply and Demand Reading (1st row) indicates that Demand only just dominated Yesterday with n low positive reading of 1. Despite the positive reading, price movement (2nd row) was down 12.50 points for the regular session trading day. This is an anomaly and a sign of a possible turning point in the market.

Supply and Demand direction (3nd row) was to the upside but not strong (Blue arrow), we need to see a lime coloured arrow for substantial strength.

Average Supply and Demand Volatility (4th row) is below 100% which is positive for the Stock Market, BUT the change in Volatility from the previous day was negative (-73 – right hand 2nd Signals dashboard) for the day, although it was positive (+40 - right hand 1st dashboard) on the average reading, showing a divergence in Volatility.

On the signals boards we see a yellow block (1st row) indicating a possible reversal pattern.

Daily Volatility direction (2nd row) was down (red triangle).

The NY Stock market traded lower (red triangle in 3rd row).

47% of stocks (4th row) traded above there VWAP (Volume Weighted Average Price).

In short we saw weakness in the markets Yesterday (can possibly attributed to the Trump tweet), but our advice will be to be careful when taking long positions at this time.

A break above 2679.25 can get the bull market on track again. A break below 2584.50 can lead to more weakness. Our money is on a move lower today.


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