Bearish price moves in many markets may mean bear trades are favored for the next few weeks or even months, says Trevor Smith of Trevor's Trading.
Traders are now hedging lightly against market corrections; they are protecting long position holdings through some put/put spread purchases. This does not mean markets are incapable of making new highs, nor does it mean that bullish trades will fail, but my opinion is that bear trade probabilities of success are increasing.
Technical chart oscillators and Bollinger Bands form the basis of my bearish opinion, but the option chains completely oppose my opinion. They reflect nearly equal bull-bear balance in delta values relative to strike distance from current prices. Options traders are becoming more sophisticated, and the options markets’ directional neutrality might be reality for the rest of September.
My last article mentioned September 4-7 as time pivots for market pullbacks, and September 7 was the daily-chart doji breakdown candlestick that led to lower prices in S&P500 futures. 9 of 10 projected ranges printed as of September 11, 2021.
Next Two Week’s Predicted Ranges (Written September 11, 2021)
E-mini S&P 500
High Range 4511-4495; Low Range 4441-4421
Slightly bear-skewed range. Space weather dates for bearish sentiment may be near the middle of the month, the 21st-22nd, and an outlier target is the 50-day moving average at 4421. Yearly Pivot: 3225;
High Range 49400-47033; Low Range 43400-42355
Bearish ranges overall; expect a camarilla pivot bounce mid-month or so.
High Range 1.192-1.188; Low Range 1.179-1.176
Neutral ranges in trending pivots likely to be exceeded upon range breakouts and joinable.
High Range $1820-$1805; Low Range $1778-1767
High Range $7185-7066 Low Range $6886-6755
Bullish short-term ranges. An attempt by the monthly-chart bear candle to reach the yearly pivot: $40.19, as a sudden, sharp news-sparked price thrust down to $54-$46 that quickly recovers is possible. Price is on moving averages in breakout mode that looks bullish.
Prior Predicted Ranges (Written August 31 for September 1-15, 2021)
E-mini S&P 500
High Range 4560-4545; Low Range 4491-4475
Slightly bear-skewed range. Monthly Pivot 4347, Quarterly Pivot (Q1): 4184, Yearly Pivot: 3225;
High Range 50050-47777; Low Range 45400-44077
Bearish ranges likely inaccurate/to be exceeded due to breakout trending character for next two week. until Monthly chart 3-wave pattern down continues, if it does; 37587, August’s Monthly chart candle is a 20/20 bar (20% range tail on both ends) and could break downside.
High Range 1.185-1.182; Low Range 1.176-1.172
Bullish ranges. 1.185 Monthly Pivot pulls from above. If it pulls back early week, it may be a second long trade towards 1.186. Still in effect is: “Trade Idea: Long Euro call spread w/ 1.185-1.190 strikes or 1.195, or a laddering thereof.”
High Range $1846-$1831; Low Range $1795-1779
Neutral-bullish ranges due to bullish weekly/monthly chart hammer candles in context of more bearish higher time frames. Aggressive traders could go long the hammer with small lot sizing, but the trade could wait 3-5 weeks/months to mature requiring longer-dated option spreads.
High Range $7175-7061 Low Range $6729-6662
Bullish short-term ranges with softer high. An attempt by the monthly-chart bear candle to reach the yearly pivot: $40.19, as a sudden, sharp news-sparked price thrust down to $54-$46 that quickly recovers is possible. Weekly chart bullish engulf candlestick pattern is on 500-week moving average support for a long trade continuation.
Trevor Smith is a technical market analyst/forecaster who is registered as a Commodity Trading Advisor. You can view Trevor’s Trading here.