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US Stock Futures Approaching Resistance

/ES (S&P 500 E-mini futures contract) has bounced back to the resistance zone that capped the previous advance & once again, has done so with negative divergences in place. This offers an objective, yet somewhat aggressive short entry here with the next, higher probability sell signal to come on a break below the uptrend line (both trendlines on ES & NQ).

ES 60-min Nov 7th

ES 60-min Nov 7th

/NQ (Nasdaq 100 futures) is once again approaching the resistance zone just overhead where the last advance was rejected. While /NQ could reverse from here, any marginal new high soon (yellow arrows) would be a divergent high.

NQ 60-min Nov 7th

NQ 60-min Nov 7th

Also, keep in mind that an impulsive & solid or sustained breakout above the recent highs in the $NDX & $SPX will mean that these major large-cap indexes have taken out those key 200-day EMAs as discussed in last night's video. A solid daily close above the moving averages on both SPY & QQQ would be bullish although by no-means an "all-clear" signal for going long as there are still some significant price & trendline resistance levels overhead for the major stock indexes to contend with.

I am passing along these levels & objective shorting levels for those interested. However, the markets have been in trading in a relatively wide sideways trading range for the past week & may or may not continue to do so going forward. If so, swing trading will remain difficult as the major indices & most stocks gyrate back & forth within the recent ranges.

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2018-11-07T12:07:51+00:00Nov 7, 2018 8:39am|Categories: Uncategorized|Tags: , , , , , |9 Comments

9 Comments

  1. Hiddenpivots November 7, 2018 9:01 am at 9:01 am

    Gm Randy and all,, been a while since I was here.. Great charts and analysis as always.

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  2. toby November 7, 2018 9:15 am at 9:15 am

    thanks Randy!

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  3. rsotc November 7, 2018 9:51 am at 9:51 am

    Following the opening bell today, QQQ is has popped up to the 172.50 significant resistance level with negative divergences in place. 60-min chart:

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  4. dan2018 November 7, 2018 10:14 am at 10:14 am

    ” A solid daily close below the moving averages on both SPY & QQQ would be bullish ”

    Should this say be above the moving averages?, don’t understand

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    • rsotc November 7, 2018 3:34 pm at 3:34 pm

      Typo… meant bearish. Bullish above the 200day, bearish below although intraday moves above & below that level, especially during periods of big price swings like we’ve had for the last month are fairly common. As such, best to wait for a weekly close above or below the 200-day (40-week) EMA on both SPY & QQQ before reading too much into that level.

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  5. bruce6999 November 7, 2018 12:23 pm at 12:23 pm

    I think that you underestimated the bullish snap back off the lows which in hindsight was a great time to go long. Still a lot of bullish sentiment that can keep the market neutral to up for a while.

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    • rsotc November 7, 2018 3:45 pm at 3:45 pm

      Agreed but it wasn’t just a great time to go long in hindsight, as I made it clear back Oct 29th, the very day the market bottomed, that the R/R was quickly shifting from the bearish to bullish side, closed out more shorts & followed up with additional posts & long trade ideas & closed there: https://rightsideofthechart.com/time-to-start-reducing-short-exposure/

      However, I stated back then & will re-iterate that my plan was not to try & milk every penny of the counter-trend bounce, rather some of the early move & then look to start re-positioning short when the time seemed right. I can certainly see the possibility of more upside but at this time, I think that the R/R for scaling back into swing shorts with relatively tight stops, in case this rally has a lot more room to run, is quite favorable. R/R & probability of a trade playing out aren’t necessarily the same. Either way, I was recent bullish & net long & as of today, have increased short exposure to a net short position (swing position) which I will either add to or stop out of quite likely by the end of this week.

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  6. Christian November 7, 2018 3:09 pm at 3:09 pm

    I agree.. I think Randy is a little too bearish for his own good :/ We are clearly in the advancing phase of a NEW intermediate cycle and one should look to buy any and every pull-back. I’ve stated this before in the TRADING ROOM, but people are stubborn and hell bent on hanging to their bearish bias.

    A+ for his TA prowess though 🙂

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    • rsotc November 7, 2018 3:48 pm at 3:48 pm

      Thx for the high-marks & congrats on sticking with your analysis. Good call so far & we’ll see if the market can power through the remaining overhead resistance levels, particularly 178 in QQQ & SPY is already starting to poke above the big 279.50ish R level. How we close the week on Friday could be quite telling of which direction the next 10%+ in the market will be.

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