Bull and Bear Case for the ES
We have entered another critical two-week stretch, this one characterized by U.S. CPI Wednesday, Quadruple Witching Friday, and the Federal Reserve’s policy decision next Wednesday. Risk assets are firm after tailwinds came from stronger-than-expected New Loans data from China Sunday night, and we have seen some selling Tuesday ahead of CPI.
Still, the 10-year and 30-year Treasury futures are essentially battling at two-and-a-half-week lows, the area in which they rallied off a low on August 23rd, meaning rates are lurking at elevated levels. A deluge of economic data this week including inflation and retail sales will collide with the added supply as we head through Quad Witching volatility and build expectations for next week’s Fed policy decision.
On the technical side, a case can be made for the bull and bear side of the trade:
Bear case: Looking at the chart, there is a lot of overhead resistance going back to the highs from December and January, and the market has not been able to get out above these levels with any conviction. This has kept a lid on prices as we are in a data driven week.
Bull Case: Since we carved the lows in October, the market has been in a solid up-trend with strong trendline support underneath it with this level being tested 2 times. As we are in this wedge, the bulls will look to continue to defend this support and look to breakout above July highs, which could be the catalyst needed to retest the highs from back in January.
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Still, the 10-year and 30-year Treasury futures are essentially battling at two-and-a-half-week lows, the area in which they rallied off a low on August 23rd, meaning rates are lurking at elevated levels. A deluge of economic data this week including inflation and retail sales will collide with the added supply as we head through Quad Witching volatility and build expectations for next week’s Fed policy decision.
On the technical side, a case can be made for the bull and bear side of the trade:
Bear case: Looking at the chart, there is a lot of overhead resistance going back to the highs from December and January, and the market has not been able to get out above these levels with any conviction. This has kept a lid on prices as we are in a data driven week.
Bull Case: Since we carved the lows in October, the market has been in a solid up-trend with strong trendline support underneath it with this level being tested 2 times. As we are in this wedge, the bulls will look to continue to defend this support and look to breakout above July highs, which could be the catalyst needed to retest the highs from back in January.
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.