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Assessments / Blog


2019-02-06
ES #F Demand is weakening


The daily chart of the S&P 500 mini futures contract above shows our proprietary SUPPLY and DEMAND Dashboard and BXB (Bar by Bar) Signals using data from the NYSE.

In our previous assessment we warned about a possible pullback, which happened on February the 1st with the ES closing down 0.25-points for the day. Although it was only a minute pullback, a lot of Supply came into the market that day, on high volume and only a 20.50-point range (spread), the lowest range on the chart (Effort versus Result).

Yesterday Demand dominated at the end of the day, again with Supply entering the market for a fair part of the day. The range (spread) was again very narrow (21.50-points), but this time it was on the lowest volume since December the 14th. This is clearly a sign of No Demand (Demand is weakening) and a short term weakness.

Price moved into the Vertical Acceleration Zone that resulted into a 94.50-point sell-off on December the 4th. The top of the area is at 2790.50 and the low at 2696.00. This zone should offer Resistance. If the market pulls back to below the 2696.00 level, we could see some more weakness for a couple of days.

Our near term outlook is Bullish, but the following warns us about a possible pullback:

  1. We have a balanced market warning signal on the Daily signals dashboard, with Average Supply and Demand Volatility increasing (Bearish).
  2. Buying pressure is weakening.
  3. Price moved to the top of the Regression channel and into the Vertical Acceleration area to the downside which started on December the 4th, which should offer resistance.
  4. Yesterday’s volume was the lowest since December the 14th and Demand is weakening.
  5. The Comparative strength ratio is weakening and at the top of the Bollinger band.
  6. Daily signals turned bearish.

A pullback may follow. Should the market trade downwards and close below 2696.00, our support zones are at 2668.00, 2640.00 and 2626.00.

End of the day Signals February the 5th:

S & D Dashboard Algorithm is Bullish, but the Daily Signals turned Bearish

These readings are an independent assessment of the one and only measureable fundamental market mover: SUPPLY and DEMAND. It does not matter if price is influenced by a geopolitical event, seasonality, fundamental economic data releases or sentiment driven news, etc. It all reflects in Supply and Demand, the “footprints” of the “Big Boys” or “Smart Money”.

Caution:

These weeks State of The Union (SOTU) address presented by President Trump is likely to roil the markets a bit, see article below.

Link to Facebook Group where these assessments are also posted regularly.

Click here for example of reversal trade taken in Feeder Cattle that can be found on this page.

 

STATE OF THE UNION LIKELY TO PROMPT ROTATION IN US STOCKS

These weeks State Of The Union (SOTU) address presented by President Trump is likely to roil the markets a bit – resulting in some increased market turmoil and rotation over the next 5+ days.  Additionally, we believe the tone of this message, as well as the Democratic response to the US President’s SOTU comments, will create a bit of an uneasy forward process for global investors.

Click on this link to read more....

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The information delivered here is for educational purposes only and is not intended to be a recommendation to purchase or sell any of the stocks, futures or other securities referenced. All references are for illustrative purposes only and are not considered endorsed or recommended for purchase or sale by MC Trading.

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