Trading Environment-Short Term: Current Environment-Bearish
Hi Everyone,
The SPX is going to gap higher again this morning (Shocker) and if they stay where they are at the open, the spx will be some 55 points off the lows with 51 of those points coming without a cash trade. It may sound like you have read this sentence before and that is because you have-with EVERY move higher we have made since the 08/05 lows. I guess if you can only move higher in overnight trading, you continue that play until the defense figures out how to stop it-if they want to stop it.
If the bears are the smart ones here and know very well, once the bots stop the gap higher opens, we simply fall back down to the lows, why wouldn't they cover near the lows and simply short the top of the range, most likely after 4 or 5 straight gap higher opens and 95% of the entire move higher? If they are going to stick to the exact playbook, we should see another day or two of gap higher opens and the spx back near the 2940-ish range. But resistance on the /es is approaching (2903) and there are bearish divergences in place already. If the pattern is going to fail, it will be to the downside, meaning the gap higher bulls don't make it to the top of the range.
2893 is the resistance line for the SPX and it looks like we may open right there this morning. I am thinking of building a short position from the 2893 up to the 2940 area, using the following pivots as entries: 2893-2920-2940 with a stop above 2960. I would not be surprised to see 2920 come into play in the coming hours/days.
Today’s range: 2893 high and 2885 low. (Gap Numbers) A break of 2893, the spx should try for 2904/2919. A Break below 2885 should try for 2876/2863. G SPX CASH 60 minute Technicals Stochastics: Neutral Divergences- No Divergences Resistance Levels: R1-2893 R2-2904 R3 2919 Support Levels: S1-2885 S2-2876 S3 2863 Trending Pivots: Higher
Yesterday, on Tuesday August 27, 2019, the price of the SPX500 index during the American session tended to decrease to the area of ??the upper weekly volatility of 2866, and there was also a zone of daily volatility. Today, at the opening of the European stock market, the index fell back to zone 2866 and rebounded from it. The target of purchases also remains the monthly volatility zone in the region of 2933, however yesterday's movement of the stock on the NASDAQ exchange speaks of a downward movement towards breaking through the weekly volatility zone of 2866 and a further decrease in the region of the lower zone of monthly volatility of 2816. Nevertheless, we see a slight increase in purchasing power on the AMEX exchange that resonates with NASDAQ.
On the hourly chart of the cumulative futures delta, there is a systematic increase in the DowJones index, as well as an increase in the SPX500, although yesterday there was a flat. But on the NASDAQ index, a tendency to decrease is very clearly seen for several days in a row, which in turn suggests the trading method based on statistical arbitrage or pair trading, which hedge funds apparently have been trading since August 26
skrinshoter.ru/i/280819/nn3lLydC.png
When checking the method of statistical arbitration, it is obvious that from the middle of August 26 there has been an uptrend on the hourly chart. Large funds buy DowJones and sell NASDAQ with a ratio of 1: 3, which was confirmed by the cumulative delta chart
skrinshoter.ru/i/280819/Lhkfkb16.png
Yesterday, on Tuesday August 27, 2019, the price of the SPX500 index during the American session tended to decrease to the area of ??the upper weekly volatility of 2866, and there was also a zone of daily volatility. Today, at the opening of the European stock market, the index fell back to zone 2866 and rebounded from it. The target of purchases also remains the monthly volatility zone in the region of 2933, however yesterday's movement of the stock on the NASDAQ exchange speaks of a downward movement towards breaking through the weekly volatility zone of 2866 and a further decrease in the region of the lower zone of monthly volatility of 2816. Nevertheless, we see a slight increase in purchasing power on the AMEX exchange that resonates with NASDAQ.
skrinshoter.ru/i/280819/Bw7jniVq.png
On the hourly chart of the cumulative futures delta, there is a systematic increase in the DowJones index, as well as an increase in the SPX500, although yesterday there was a flat. But on the NASDAQ index, a tendency to decrease is very clearly seen for several days in a row, which in turn suggests the trading method based on statistical arbitrage or pair trading, which hedge funds apparently have been trading since August 26
skrinshoter.ru/i/280819/nn3lLydC.png
When checking the method of statistical arbitration, it is obvious that from the middle of August 26 there has been an uptrend on the hourly chart. Large funds buy DowJones and sell NASDAQ with a ratio of 1: 3, which was confirmed by the cumulative delta chart
skrinshoter.ru/i/280819/Lhkfkb16.png