Emini S&P 500 – Range bound between 2700 and 3000 – building consensus on the Eastern side of our longer term bell curve but for how long?

Emini S&P 500 – Range bound between 2700 and 3000 – building consensus on the Eastern side of our longer term bell curve but for how long?

Trading within the 6 months Daily 1st Standard deviation high and low

The speedo above is showing the price action this month on the EMINI S&P 500 for the first 12 trading days. We have overlaid a 6M-D QD levels (showing the trading activity by Standard Deviation) between February to July 2019 with the levels projected into August.  The market is getting resistance at 2936 because this area represents the QDH 68% level over multiple time periods meaning that it is a very key level.

Building Consensus above all the longer-term consensus areas.

The market is likely to trade in a range between 2700 – 3000 as it continues to build the longer-term bell curve on the Eastern side.  The volatility since the beginning of the month is typical of a market which breaks back from a new high into very actively traded areas.  This is clearly indicated by the QTAPs shown above since they highlight the most actively traded areas (by time) for time periods from 2m-D to 36M.

A break below 2700 will take us into an area of ever-increasing support

Alternatively, if we have a break below 2700 the market should find ever-increasing support on the western side of the bell curve. The bias to the upside remains unless or until 2500 as key support is materially broken by more than an intraday close below.  Here is a 36m Speedo below highlighting the trading in the last two months.  It is linked to a 2 mos Candlestick chart and we are showing 12m Fib retracement levels and 36m Quantlogic Distribution levels to provide context.

Longer-term perspective

For the bears, if we look at a 60m speedo the QDHL 99% (3rd Standard deviation low) for 36m is at 2100 which coincides with the most traded area of the East side of the 48m and 60m bell curve.  If we did have a significant move down below 2500 this would open up 2100 as a longer-term bear target.

Brief look back

What a difference three weeks make to market jitters.  Only a month ago as we can see from this speedo below (6m Jan-Jul ’19) the market in July traded consistently albeit in a consolidation pattern above the previous highs leading many to speculate on a breakout.  In our last post on 23rd July ’19 on the Emini we clearly depicted two scenarios one was for the market to break out and the second was to advocate as an alternative that the market could well retrace back to the centre of the bell curve.  Indeed, this is what happened but as indicated earlier this volatility is to be expected with this type of bell curve formation.



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