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- Trend Favors the Bulls Even as S&P 500 Looks Tired
Trend Favors the Bulls Even as S&P 500 Looks Tired
It's hard to fight the trend even as the S&P goes for 4200
Danny Riley
April 19, 2023
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A quick note. My good friend Rich — you may know him as Handelstats — will be holding a webinar on Thursday after the close. For more info, please visit this link.
Our View
The chances of a sustained rally are getting low, but as I have always said: We are not here to fight City Hall and if the ES is going up, I want to go for the ride, which I have been despite my cautious outlook on the “bigger picture.”
Take yesterday’s Our Lean for example. Even though we laid out several issues plaguing our country/financial system, we were looking to buy the dip, saying:
The final hour has turned into the 'hour of power' regardless of the 3:50 imbalance. Those are the 0 DTE players, if I had to speculate. The ES tends to do well after 2 pm ET.
Our lean is we still see higher prices, but we are coming up against big resistance at the 4220-4230 zone. Ideally we would look to sell the early rallies and buy the 30+ point pullbacks.
How far did the ES fall from the open down to yesterday’s low? 29 points. What happened late in the session? The ES dipped down to ~4169 at 2:45 and reversed higher, ultimately cruising to its afternoon high.
I tend to be a buy-the-breaks kind of trader; I like jumping in when everyone is selling and while there have been some good, strong bounces since we topped out in early 2022, each rally has ended up being a dead-cat bounce in a bear market.
If by chance I am wrong about that, then the tide will change at some point. That all said, we’re in an uptrend for the time being, so let's not lose sight of that.
Our Lean
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MiM and Daily Recap
The ES traded up to 4198.25 on Globex and opened Tuesday's regular session at 4193.50. The ES traded 4198.25, sold off down to 4187.75, rallied back up to a lower high at 4194.75 and then sold off down to new lows at 4166 at 10:31. From there, it back-and-filled until 11:37 when the futures rallied up to 4175, sold back off to a new low at 4164.50 and then rallied up to the VWAP at 4179.50 at 12:39. From there, it sold off down to a 4172.50, 'double bottomed' and then rallied up to a 4182, which remained resistance all afternoon.
The ES traded 4179.25 as the 3:50 MiM showed $362 million to buy, traded up to 4183, down to 4176 and closed right where it started 10 minutes prior — at 4179.25. It dropped down to 4174.50 after NFLX reported, rallied back up 4181 and settled at 4179 on the 5:00 futures close, up 3.25 points or 0.08% on the day.
In the end, the ES did it again — it sold off from higher prices and slowly recovered. In terms of the ES’s overall tone, it acted better than the NQ. In terms of the ES's overall trade, volume was low at 1.37 million contracts traded.
Technical Edge —
NYSE Breadth: 53% Upside Volume
Advance/Decline: 45% Advance
VIX: ~$17.50
S&P 500 — ES
ES Daily
Key Pivot: 4175
Upside Levels: 4200, 4217-25, 4240-45
Downside levels: 4142.50 + 10-day, 4115, 4095-4100
SPY…
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Guest Post
PTG/Taylor 3 Day Cycle
Prior Session was Cycle Day 1 (CD1): Market reached its Penetration Level (4194), then the decline started. Cycle Low was established at 4164.50. Prior range was 33 handles on 1.367M contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): There is room for the Rally to continue. However since a good part of the rally is in place, we could be in for a normal CD2 consolidation day. As such, scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 4165, initially targets 4185 – 4190 zone.
Bear Scenario: Price sustains an offer below 4165, initially targets 4155 – 4150 zone.
PVA High Edge = 4181 PVA Low Edge = 4170 Prior POC = 4179
*****The 3 Day Cycle has a 91% probability of fulfilling Positive Cycle Statistics covering 12 years of recorded tracking history.
For more detailed information for both bullish and bearish projected targets, please visit: PTG 3 Day Cycle and/or reference the Cycle Spreadsheet below:
Link to access full Cycle Spreadsheet > > Cycle Day 2 (CD2)
Thanks for reading,
PTGDavid
Open Positions
Bold are the trades with recent updates.
Italics show means the trade is closed.
Any positions that get down to ¼ or less (AKA runners) are removed from the list below and left up to you to manage. My only suggestion would be B/E or better stops.)
** = previous trade setup we are stalking.
FSLR, NVDA, QQQ, AAPL, down to runners. Congrats, all. Great sequence!
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Go-To Watchlist
Feel free to build your own trades off these relative strength leaders
Relative strength leaders → Tech remains absolutely the strongest group lately.
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Economic Calendar
