Here’s How You Could Have Known
While it is challenging to predict market direction, here
is one set of indicators that can give your trading a powerful edge.Â
They are called the
Market
Bias Indicators and are a combination of proprietary and non-proprietary
indicators that we calculate and compile for you daily. Any one signal from this
page can provide a clue that stock index futures will move in a certain
direction. But combining these signals provides an even better edge. If three or
more arrows from the page point in the same direction, this is considered a
critical mass and a strong indication that equity index futures will move in
that direction. Make sure to check this page daily.
Today we had six signals from the
Market
Bias Indicators Page, all pointing down, an unusually high number. The
indicators were practically screaming that stock index futures could pull back
from torrid runs that have taken the Nasdaq 100 futures
(
NDM1 |
Quote |
Chart |
News |
PowerRating) up
15% in a week and S&P futures
(
SPM1 |
Quote |
Chart |
News |
PowerRating) up 6.5% over the same time
period. The S&Ps ended the day 7.90 lower at 1250.80, but were down as many
as 17 handles at their low. Naz futures finished flat after a descent of 38, and
Dow futures
(
DJM1 |
Quote |
Chart |
News |
PowerRating) closed 91.0 lower at 10,644.0.
Interest rate futures rallied initially as stock indexes
pulled back. Bonds have slipped as many as 7 big points since their March 22
high as traders adjust positions to account for a change from contracting to
expanding economic forecasts (the Fed has cut interest rates four times this
year and US short-term rates are now .25% below European rates at 4.5%).Â
T-bonds
(
USM1 |
Quote |
Chart |
News |
PowerRating) traded straight up since
their opening down-tick but then failed at intraday double tops to shed a full
point before closing nearly flat at 100 16/32. As noted in the Mid-Day Futures
alert, 10-year notes
(
TYM1 |
Quote |
Chart |
News |
PowerRating)Â failed at intraday triple tops
and lost half a point before also closing just 1/32 lower at 104 6/32.Â
June dollar index futures
(
DXM1 |
Quote |
Chart |
News |
PowerRating) gapped down below a neckline of a
head-and-shoulders top in a negative technical development for the DXM. The Japanese yen’s
(
JYM1 |
Quote |
Chart |
News |
PowerRating)
decline tempered the dollar’s losses after Finance Minister Kiichi Miyazawa
implied Japanese policy makers do not want too strong of a yen while the country
tries to export its way to economic health. The yen had rallied for four
straight days but is down .0057 to .8223. Notice the symmetry in the pullbacks.
Euro FX futures
(
ECM1 |
Quote |
Chart |
News |
PowerRating) rallied .0100
to .90350, doing the most to drag down the dollar index.Â
Soybeans
(
SK1 |
Quote |
Chart |
News |
PowerRating)Â got some traction
early on for a gain of 3 cents out of their Turtle Soup Plus One Buy
setup but closed flat at 429 1/4. Beans are setup in a descending triangle
and traditional measured-move analysis out of this pattern suggests a test of
415 (for additional information on calculating measured moves out of such
patterns, see my
article Trading Measured Moves in the Futures Education section).Â
June lean hogs
(
LHM1 |
Quote |
Chart |
News |
PowerRating) are trading just above the trigger of their Pullback From Highs
setup out of a narrow pattern, providing defined-risk entry. This chart could be
interpreted as a bullish flag or bearish triple tops (H&S), so look to play
either way. Hogs finished up .450 at 72.425.