The Daily Market Forecast

For Mon 210920 (Plenty can change by the open, be aware.)

Globex Review: The melt-down accelerates worldwide. I’ve noticed over the years that reversals are tougher to trade in a fast-moving market (either direction). Breakouts are better however the wiggle room may need to be wider. Three tradeable setups last night, two small winners that cover the loser.

Day Session Analysis: Sentiment is VERY BEARISH. FOMC coming. Melt-down accelerates. All this equals fear and risk-off.  STATS say buy-the-dip will come (when is a guess). Monday (both sessions combined) garnered 27% of all the gains over the past 5 years in dollars. Reversals and Breakouts are about even. Trading ES/CL/GC using BB Rev with new filters. VERY cautious with SPXW credit spreads due to expected wide range. Leaning toward ITM spreads for now.

S&P 500 Futures CPL: 4420.50/4427.50. We’re trading BELOW the CPL (short edge below, long edge above) and BELOW the equilibrium 4429/4431 (open below = short edge, open above = long edge).

The World Index: (+100/-100) PLUMMETS from +7 to -93 (contrarian alert… LONG edge).

Catalysts: Housing Market Index @ 10:00. Evergrande failure in China spooks the markets.

Trends: 60 min DOWN, daily DOWN (long edge).

Chart: Low outside day: Win/Stop% about the same, longs CRUSH shorts earning 10X the profit. Opening -1.60% (solid long edge). $TRIN XMA stable at 1.01 (long term outlook: stay long).

Globex: The range of 68 (likely wider by the open) suggests a day session range around 78 points on a RISING ATR of 41.48. Prior forecast around 40 points, actual 48.75.

Trade Well,

Mike Siewruk

P.S. For a free “mini-course” packed full of lessons on HOW to trade the Blog… Watch this video.