New All-Time-Highs As We Enter The Earnings Season

New All-Time-Highs As We Enter The Earnings Season

S & P500
Another week and yet another long position in the S & P500 E minis. As mentioned in the last weekly piece "Record Fund Outflows and New All-Time-Highs" I went long from the high of the inside bar. It is impressive how this technique is telling you the next bar. That position is supported by my recession indicator. It dropped and as of today 07/14/2019, it is showing a 24% probability of having a recession in the US in the next 6-12 months.



What's next for this market? I'm using a trailing stop with a soft target at 3040 level. What concerns me is the growing expectations that the Fed will cut interest rates with 0.50% this month (0.25% is considered as it will happen for sure). That's going to help the market go higher, but the wrong expectations can lead to serious market moves. Be on alert for any news that can mark those expectations as wrong. We will try to focus more on this topic in the next weekly pieces as we are approaching the FED's meeting.

Do not forget that the earnings season starts this week. According to FactSet, the companies from the S & P 500 are estimated to report a 2.8% fall in earnings. With S & P500 at new all-time-highs, it will be very interesting to watch how many positive surprises we'll have this time :)

COPPER



We had a very crowded short trade last week which led to the liquidation of positions. With the seasonal influence on the downside and indicators showing lack of accumulation, it is possible to see a short-term downward move towards last week's bottom at 2.6120. Will look for a short signal in the next few days.

BRITISH POUND
I will look for a signal in the British Pound futures to the downside.



Rationale:

  • Downtrend
  • Weakest currency
  • No accumulation here
  • No extremes in COT data, yet.
  • It is close to a resistance zone 1.2929.


If there is a sell signal, it will be given in the next few days without breaking this resistance. I expect a simple signal with a low probability of stop-loss runs.

Let's find your missing piece!

Vassil Banov,
Founder of Piece of Trading

Trades mentioned here are either taken or will be taken by the author if the right conditions appear. They are NOT recommendations nor any of this constitute investment advice. Please read the Risk Disclaimer

Seasonal indicators courtesy of Larry Williams, ireallytrade.com. Charts made with TradeStation. tradestation.com

TAGS: COT, British pound, COPPER, S&P500, Earnings season, Recession, Grains, Support, Resistance

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