Chicagostock Trading

Chicagostock Trading

The Turkey Squeeze - T/A Galore: 2 Inverted Head/Shoulders and a Cup/Handle

 

 Last week, the market took out the early November low of 256225, falling into 255550, before quickly bouncing back to 257150.  This break of the monthly low turned into a failed breakdown and a head fake as the market retested 2562 into the end of day, creating a right shoulder for an inverted head/shoulder pattern.  Shorts below 2562 were left trapped, giving opportunity to expand the range up to 257150.  

 

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US Dollar Down 10%, Now What?

 

Since our last report on March 17th titled "Will President Trump Devalue the US Dollar?", the US dollar is down over 9%, falling from 100 down to a recent low of 90.79.  This does not mean a dollar devaluation has occurred, or will, however as we pointed out, there are risks out there that needed to be factored in, and the market is doing just that.  

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Cash Market Games

Sometimes most of the move is done in the overnight (Globex) session, and by the time the cash market opens and everyone is selling the weakness, the cash market holds to prevent these traders from getting paid. Interesting? Weird? This is what I call CASH MARKET GAMES.  Not only does a lower open lure in shorts, but when it pushes back to close on the highs, it sucks in new longs that need to get paid in the following session. Should the market open lower in the following session, those new buyers are on the hook and short sellers have to come back chasing lower. 

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The Bear Trap into Yellen's Short Squeeze

 

On Thursday of last week, the market sold down to a low of 240525, which successfully tested and held the June low.  Friday saw the market overcome the 3D pivot range resistance to reverse the negative momentum. This reversal allowed Monday and Tuesday's 3D pivots to turn into support.  Both days saw the market chop sideways into awaiting for Janet Yellen on Wednesday.  This in turn, creating a cup/handle pattern, with room to expand into 2449 on a break through 2427.  

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Is The Trump Trade Over?

  

 

When Trump took hold of Florida on election night, the SP500 futures sold off to a low of 2028, hitting its limit of 100 points to the downside.  The move, was reversed within the same day, seeing the market recover to push back to 2180 once the election was over and Trump was confirmed as the new President-elect.  The election of Trump, caught many off guard, however the market reversal also caught many off guard as a majority was looking for a sell off should Trump have been elected.  By taking the reversal of 2180-2030 of 150 points, this gave an upside objective of 2330.

 

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