2019/07/29 ~ Market Framing

I’ve come into this week feeling the opposite of the consensus I have researched online. The consensus of short term traders seems quite short, and I have a more bullish outlook for the week leading up to the the FED event in the market.

Of course, nobody can predict what the market is going to do anytime, let alone in the crazy trading that happens during a news event like a FED rate announcement. However, all I can go on is that the trend is up in the markets. Plus, the last two times the market tried to swing short, it basically failed to make more than some pennies for the bears. Let’s look at some charts.

ES day chart to me is showing signs of bullish continuation. If we take out any support and resistance studies and simply look at the trend’s momentum, we see that the Buy and hold trend I follow is up 142 pts from 2879 on this run. The last two threats to the moving average failed. Then the swing signals I like from the Fisher transform are also calling out a resumption in the trend off of the last failure. I like long 3021-24 area w/ a 2998 stop. Backtest of FT’s long trades depicted.

Fisher Transform Setup

So the next ideas that must be added to frame the market are some support and resistance levels. I use the methods of Frank Dilernia and Robert Krausz for the indicators you see next. The time frames cycle through the dynamic ranges of each. We look for the break or adherence to one to move through or not to the next. Also, I look at the alliance these levels make with Fibonacci levels.
I have found a nice line in the sand to continue saying my bull theory is correct: the 5-day pivot of 3013 which is about the 50% Fib as well. Then beyond that downward for shorts would be the 3005 weekly pivot target. After that, Thursday’s low (7/25) of 2998 is the Alamo for bulls.
Targets upward before the FED are realistically 33, 38 to 47.

Daily-Weekly Dynos + Fibonacci

If the weekly were to break and extend on the FED report… you must go out time frames to find dynamic targets based on expected range. This gives you the Monthly target of 53.75 and the quarterly target of 71.25 both expected within a month, but then who knows what a rate cut will do to speed up this process. The yearly target is also 53.75 and that could be the true test if we are officially in liquidity excitement mode. Otherwise, bears will eventually have their day.

Macro Dynos

It should be noted that I personally do the macro analysis first always, but it happens to be last in the post. If you study this everyday, you know the macro story. It doesn’t change often, and if it does it isn’t much.
Good trading to you all,

~ B3 d^.^b

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