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Last week I suggested that if the market took out option expiration Friday’s high, we could begin to see the market to ES 2,000. That is precisely what unfolded. On Monday, options expiration Friday’s high was exceeded and the run began northward before settling at around 1987 at the end of the week. The weekly MTPredictor resistance begins at 1997 and the magical ES 2,000 just above that. The question now becomes, will the rally continue or has the ES become extended and due for a pullback?
The AUDJPY, which is correlated with the ES is also coming into some major resistance. This will be one to watch to see if it precedes the ES lower or continues its rally.
A nice Holy Grail trade is playing out in the USD and we have seen the Dollar strengthen against many of the commodities, including the metals. The Dollar still has some room to the upside but is beginning to get a bit extended so keep an eye on this.
Check out the rest of the analysis in tonight’s MTPredictor Weekly Market Update and follow me on Trading View
MTPredictor runner up 2011 Readers' Choice Award for best futures trading system.
-Read the MTPredictor article "95% of Traders are Insane!" in the August 2012 issue
In today’s MTPredictor trading webinar we continued last weeks discussion of the context the outside gap provides the trader. These gaps give the trader a heads up that a trend type day is setting up.
This week we have seen a number of these outside gaps which gave the trader some excellent opportunities to hop on the anticipated upward trends.
After covering some of the basic, software generated trade setups, I ran across, what we call, a Holy Grail trade setup. This is a very low risk, high reward trade setup that starts off a major support or resistance level.
Check it all out in today’s recorded MTPredictor trading webinar.
The ES rallied off the weekly wave 4 support and into options expiration last week. Friday ended with sellers overcoming buyers and a high volume VSA spike. This means there was unusual volume activity on Friday. This puts the daily ES in a wave 2 or b resistance and a make or break situation. I think if we take out Friday’s highs, we may be headed for that weekly wave 5 target and ES 2,000. If, on the other hand, we take out Friday’s low then we may retest 1,900.
Silver is still pulling back after failing to make a new, higher weekly swing high. Below $19 is probably a good accumulation area with the minimum wave 5 target still sitting at $17.60.
The Dax ended the week at the lower end of its range. It still has yet to reach its weekly wave 4 DP target so keep an eye on this.
Check out the rest of the analysis and check me out on TradingView .
In today’s MTPredictor trading webinar, I covered the 4-step trading process along with the basic, low risk, high reward trade setups that the software provides automatically.
Later, I presented the concept of the outside gap and how to trade it using MTPredictor. Even if you don’t trade these setups, they will give you context for your trading so you don’t trade against these outside gap type days.
The S&P (ES) and the AUDJPY both hit their targets last week. In the case of the ES, the target actually exceeded the wave 4 Decision Point. This level is below the 50 period moving average but still above the 200 day moving average. This is considered a value area for professionals to buy in up trending markets like the S&P. It looks like this was the case on Friday but we still have some strength on the MTPredictor Strong Trend Filter to the downside so we’ll have to watch any rallies closely due to the tendency they have in eventually rolling back over when the STF is still showing strength to the downside.
The AUDJPY had a nice short trade setup which I posted on TradingView.com a week ago. This setup coincided with the S&P sell and paid off for better than 4 times the initial risk. This market will tend to lead/follow the S&P and it is coming off a good support level so at least a bounce here is expected.
The Dax came just a few points away from its weekly wave 4 DP short target. It will likely follow the Dow and S&P if they rally this week so protect profits there if you have not taken them yet.
Even though silver broke its weekly down trendline, it still has failed to take out any of the prior weekly swing highs. This means that the $17.60 MTPredictor wave 5 target is still possible. I will look at it as a potential buying opportunity if it does come down into that level.
Check out the rest of the analysis in tonight’s MTPredictor Weekly Market Update.