Bear trap, or bull trap?
So the tea leaves were right. With the lack of enthusiasm and participation from big money we ended up having yet another rejection. From the Asia session last night to to cash session today. Will the market let the bearish divergences play out?
This feels and looks a lot like 06/10 - 06/11 where we left that island top reversal. But even then we had a nice beartrap up there too. Technically on the chart this is a failed breakout. We got rejected from the breakout area back into the range we had just tried leaving. But, shens afoot? We'll see.
We obviously gapped down this morning and after a successful goal line defense by the bulls it looked like we were going to actually try and go for the gap as we broke out of the range we started to create. But with bearish divergences and a rising wedge that was also, a failed breakout or bull trap. We essentially traded all the way from that top to the lows of the day. A quintessential rejection. Volume was still not as good as i would like to see but it was an increase from yesterday by about 14m. Meaning we had more participation on the downside than we did on the breakout. Also indicative of a failed breakout. A nice little peak outside the range to say hi before going back below water.
BUT
Those damned 5 guys in a room. And your lunch money.
It looked as if everyone was caught off guard by our breaking out of that range yesterday (high five China!) with the VIX elevated and a lack of follow through. What this could be is just a liquidity hunt/bear trap so big money can fill some positions before they gap us back higher again tomorrow, and they're on their merry way to fill the gaps back to ATH's. On the island reversal we had back on 06/05-06/10 we had a pretty healthy reversal only to be complete retraced the very next day to get us back into range. We all know how that ended but still i don't put it past the bulls to try and get us back above the breakout area and back above this range where it looks like we could be consolidation/flagging for the move higher. The entire bull thesis i think hinges on them getting us back above this area. That and the market was on a 5/6 day winning streak and this could just be the take profit/pull back before we get back to regularly scheduled programming.
We now have created even more gaps down below on this run up, and across the board we've printed at least an intraday reversal/failed breakout. excluding NDX, which had a bearish close but stopped short of a bearish engulfing. If that's the case we did just print a lower high trying to break out back to the highs from February. That's bearish. Now, i say that with a grain of salt because we all know what market we're dabbling in and we all know that it doesn't HAVE to do anything. But, with that being said technically it looks like we're seeing the beginning of weakness if not a reversal.
On top of all this we've been printing bearish RSI divergences since about 07/01, which you can track up into the 2h TF. Now, again, bearish divergences are fickel when you're trading these large indexes just because they don't give a shit most the time. There's too much noise, but it's there. And when you have these divergences the elevator down can be the express elevator down. The real question is if we get back down towards $300 do we print another higher low. We have these successive triangles printing on the daily and it's essentially a ticking time bomb either direction.
On the 5m we show an open right at or below the price range we were in and the breakout area. We tested, and failed getting below this morning and the bulls traded us all the way to the top of that range where they attempted to, and failed breaking us out of. We then essentially printed a rising wedge with bearish divergeces on the RSI and traded all the way back down, and eventually out of the range, and then through the breakout area into our $300-$315 zone. I was fully expecting the bulls to fight their asses off to keep us above the breakout area and they tried, but again they seemed on their heals again. Notice majority of the higher than average volume candles are red
1h showing the same. With a rejection from the zone (market too high imo) and a trade back into the consolidation range. We are still above the megaphone pattern trendline though. One thing i would like to note - Notice how back on 06/10 we even had the ascending wedge play out as well? Spooky huh?
Zoomed in view of the daily showing the exact same. Filling of the gap today and then a rejection back below open back into the range. Notice new gaps set as horizontal rays. Those will be the new targets on the downside
Zoomed out view of the daily showing these successive triangles we're printing
SPX was the last to fall today when it came to taking out it's low's from today and yesterday, but it did, and feel not only back into range but also to it's first support line. Rejection
SPX still closing ABOVE all of it's subsequent tries to get above this level
ES giving up it's top trendline from megaphone and the decade long trendline (again)
Also printing that same RSI divergence from 07/01-07/02
ES daily looking kind of ugly, BUT still above the downsloping trendline from each other time we tried to get above this level
IWM also filling the gap today and then giving up the ghost and even it's support line
Just looks tired, rolling over
If it breaks the .382 fib .5, and .618 and the bottom of gap at $125.30 are targets. Kind of looks like a bull pennant though doesn't it?
This is probably most telling. The VIX is telling the same story from 06/10 - 06/11 as well almost to a T. We had a bullish hammer yesterday after a wick through the 200, we found support today at local and at the .786 fib and reversed and now this looks like it's turning into a confirmed reversal. Tomorrow will tell
DJI having the poorest showing today showing a knife through that ever important trendline, a shot at regaining it, and just giving up the rest of the day
This would be it's 6th rejection from it's 200 period MA, finding support on the 13 period EMA though
NDX just in a perpetual look of wanting to top, but never does
XLF pointing to storm clouds
DJT actually emulating SPY (airlines, mainly)
Silver trying to beat down that door and follow big brother silver. If you trade silver that's an objective long if it closes above it on a daily basis. Third attempt in five days
If you missed this today was probably your last chance to catch the bus
Bonds pointing to risk off, again
So it Looks as if we're having a rejection and/or reversal, but we still need at least one more day to confirm. We also are ranging in this area creating successive triangles coiling up for a move somewhere. I feel like everyone's holding their breath waiting to see where. Like i said yesterday earnings will induce some volatility both ways and i think that's what instutional money is waiting for.
Believe it or not i'm still -19 delta. I was way higher on some credit spreads i had over the weekend and actually got out of them for a small profit yesterday but still haven't gotten stopped out on my long puts. I did not add or subtract delta today.
Targets on the downside are: $312.10, again. Gap at $310.52. and Gap at $308.24. Anything past that we're breaking the triangle and getting into danger zone for the bulls in an intermediate basis
Targets for the upside are $315.14, and just getting back above the range in general. I would have like to see the gap filled at $319 but i guess that will have to come another day.
Hope you had a good day trading and keep your head on a swivel especially tomorrow and overnight for where they want to open us in the morning. I would like to see us gap down tomorrow to have the technical thesis play out but that'd be too easy. Watch for a gap back above the range and we'll go from there.
Thank you!
This is not trading advice. This is my own personal opinion based on my own personal TA. You are responsible for your own trades.
So the tea leaves were right. With the lack of enthusiasm and participation from big money we ended up having yet another rejection. From the Asia session last night to to cash session today. Will the market let the bearish divergences play out?
This feels and looks a lot like 06/10 - 06/11 where we left that island top reversal. But even then we had a nice beartrap up there too. Technically on the chart this is a failed breakout. We got rejected from the breakout area back into the range we had just tried leaving. But, shens afoot? We'll see.
We obviously gapped down this morning and after a successful goal line defense by the bulls it looked like we were going to actually try and go for the gap as we broke out of the range we started to create. But with bearish divergences and a rising wedge that was also, a failed breakout or bull trap. We essentially traded all the way from that top to the lows of the day. A quintessential rejection. Volume was still not as good as i would like to see but it was an increase from yesterday by about 14m. Meaning we had more participation on the downside than we did on the breakout. Also indicative of a failed breakout. A nice little peak outside the range to say hi before going back below water.
BUT
Those damned 5 guys in a room. And your lunch money.
It looked as if everyone was caught off guard by our breaking out of that range yesterday (high five China!) with the VIX elevated and a lack of follow through. What this could be is just a liquidity hunt/bear trap so big money can fill some positions before they gap us back higher again tomorrow, and they're on their merry way to fill the gaps back to ATH's. On the island reversal we had back on 06/05-06/10 we had a pretty healthy reversal only to be complete retraced the very next day to get us back into range. We all know how that ended but still i don't put it past the bulls to try and get us back above the breakout area and back above this range where it looks like we could be consolidation/flagging for the move higher. The entire bull thesis i think hinges on them getting us back above this area. That and the market was on a 5/6 day winning streak and this could just be the take profit/pull back before we get back to regularly scheduled programming.
We now have created even more gaps down below on this run up, and across the board we've printed at least an intraday reversal/failed breakout. excluding NDX, which had a bearish close but stopped short of a bearish engulfing. If that's the case we did just print a lower high trying to break out back to the highs from February. That's bearish. Now, i say that with a grain of salt because we all know what market we're dabbling in and we all know that it doesn't HAVE to do anything. But, with that being said technically it looks like we're seeing the beginning of weakness if not a reversal.
On top of all this we've been printing bearish RSI divergences since about 07/01, which you can track up into the 2h TF. Now, again, bearish divergences are fickel when you're trading these large indexes just because they don't give a shit most the time. There's too much noise, but it's there. And when you have these divergences the elevator down can be the express elevator down. The real question is if we get back down towards $300 do we print another higher low. We have these successive triangles printing on the daily and it's essentially a ticking time bomb either direction.
On the 5m we show an open right at or below the price range we were in and the breakout area. We tested, and failed getting below this morning and the bulls traded us all the way to the top of that range where they attempted to, and failed breaking us out of. We then essentially printed a rising wedge with bearish divergeces on the RSI and traded all the way back down, and eventually out of the range, and then through the breakout area into our $300-$315 zone. I was fully expecting the bulls to fight their asses off to keep us above the breakout area and they tried, but again they seemed on their heals again. Notice majority of the higher than average volume candles are red
1h showing the same. With a rejection from the zone (market too high imo) and a trade back into the consolidation range. We are still above the megaphone pattern trendline though. One thing i would like to note - Notice how back on 06/10 we even had the ascending wedge play out as well? Spooky huh?
Zoomed in view of the daily showing the exact same. Filling of the gap today and then a rejection back below open back into the range. Notice new gaps set as horizontal rays. Those will be the new targets on the downside
Zoomed out view of the daily showing these successive triangles we're printing
SPX was the last to fall today when it came to taking out it's low's from today and yesterday, but it did, and feel not only back into range but also to it's first support line. Rejection
SPX still closing ABOVE all of it's subsequent tries to get above this level
ES giving up it's top trendline from megaphone and the decade long trendline (again)
Also printing that same RSI divergence from 07/01-07/02
ES daily looking kind of ugly, BUT still above the downsloping trendline from each other time we tried to get above this level
IWM also filling the gap today and then giving up the ghost and even it's support line
Just looks tired, rolling over
If it breaks the .382 fib .5, and .618 and the bottom of gap at $125.30 are targets. Kind of looks like a bull pennant though doesn't it?
This is probably most telling. The VIX is telling the same story from 06/10 - 06/11 as well almost to a T. We had a bullish hammer yesterday after a wick through the 200, we found support today at local and at the .786 fib and reversed and now this looks like it's turning into a confirmed reversal. Tomorrow will tell
DJI having the poorest showing today showing a knife through that ever important trendline, a shot at regaining it, and just giving up the rest of the day
This would be it's 6th rejection from it's 200 period MA, finding support on the 13 period EMA though
NDX just in a perpetual look of wanting to top, but never does
XLF pointing to storm clouds
DJT actually emulating SPY (airlines, mainly)
Silver trying to beat down that door and follow big brother silver. If you trade silver that's an objective long if it closes above it on a daily basis. Third attempt in five days
If you missed this today was probably your last chance to catch the bus
Bonds pointing to risk off, again
So it Looks as if we're having a rejection and/or reversal, but we still need at least one more day to confirm. We also are ranging in this area creating successive triangles coiling up for a move somewhere. I feel like everyone's holding their breath waiting to see where. Like i said yesterday earnings will induce some volatility both ways and i think that's what instutional money is waiting for.
Believe it or not i'm still -19 delta. I was way higher on some credit spreads i had over the weekend and actually got out of them for a small profit yesterday but still haven't gotten stopped out on my long puts. I did not add or subtract delta today.
Targets on the downside are: $312.10, again. Gap at $310.52. and Gap at $308.24. Anything past that we're breaking the triangle and getting into danger zone for the bulls in an intermediate basis
Targets for the upside are $315.14, and just getting back above the range in general. I would have like to see the gap filled at $319 but i guess that will have to come another day.
Hope you had a good day trading and keep your head on a swivel especially tomorrow and overnight for where they want to open us in the morning. I would like to see us gap down tomorrow to have the technical thesis play out but that'd be too easy. Watch for a gap back above the range and we'll go from there.
Thank you!
This is not trading advice. This is my own personal opinion based on my own personal TA. You are responsible for your own trades.
Note
Forgot to post earlier. Take as you will. DXY.Note
I've already seen flashes of 500+ contract buy orders for ES.Double repo day today.
We'll see.
Note
They're trying to pump us into the open. We'll see if they follow through after a super quiet overnight session.Note
Looks like they want it. An hourly close above $315.14 is bullish..Note
Buy the dip crowd out in force today. Everything's green.Note
Apparently they're all going home.Note
SPY still holding it's range that it regained. Hourly close here in 5 mins.Note
That was close. We'll see if the bulls can hold the line.Note
IWM already gave up supportNote
Silver: Maybe maybe maybeNote
Looks like everyone's sitting on their hands. Volume's died already. Even the first hourly candle was below average.Note
Going for the gap @ 313.72Note
Bears are in business. Volume picked up, we'll see if they can take the momentum.Note
IWM nearing danger zone for bullsNote
Canary in the coal mine ladies and gents. QQQ 5 min. If this breaks it brings the entire market with it.Note
Alright gap filled. We'll see what they do with it. DJI has already filled it's gap as well.Note
Next target $312.10Note
*watches intensely*Note
Buy the dip crowd being called back to active duty. This trendline is the top trendline from the yearly megaphone pattern. They might try and bounce us here.Note
Look at this save on IWM.Note
These cheeky bastards over in tech land. No bear fun allowed.Note
As long as we have this dead volume the algos are going to trade us upwards. Basically at the .5 fib right now on the day.Note
Bulls not going down without a fight. SPX just broke back above into it's range.Note
It's almost as if the algos control the market.QQQ
SPY
Note
Not sure if this is an algo pop, short squeeze, or what. But it looks like they want to get us back above range.Note
That last 5m candle we just had had only 138k shares traded...Note
Until we break the trendline we bounced off of we're neutral. Bulls have the ball above $315.14, bears have the ball below $313.10.Note
Is this it? Are we finally going to do something?Note
They're going for it.Note
Obligatory close above both price levels to appease the algo gods.Note
Bulls trying to hold the ground they just took. Close should be interesting.
Related publications
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.
Related publications
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.