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Major U.S. Futures: Line Limits

By Tim KnightStock MarketsMay 23, 2022 12:53AM ET
www.investing.com/analysis/major-us-futures-line-limits-200624681
Major U.S. Futures: Line Limits
By Tim Knight   |  May 23, 2022 12:53AM ET
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It would be easy to make an argument for either side at this point. For the bulls, one could argue that the market is deeply oversold and long overdue for a powerful counter-trend rally. For the bears, one could argue that the topping pattern is nowhere even close to having expressed itself to the downside and that, rally risk be damned, the broad trend is going to be lower.

Just like last weekend, I am facing the new week with apprehension and anticipation. Here is the weekly chart of the /ES to show the muddled state we are all in:

ES Weekly Chart
ES Weekly Chart

Below are recent 5-minute bar charts of important equity futures during the last few days of last week. In each case, I have highlighted what I feel is an important barrier. Break above it, and the bulls have a chance at a more substantial counter-trend rally, Remain beneath it, and the bears remain large and in charge.

Here is the S&P 500 futures………

S&P 500 Futures Chart
S&P 500 Futures Chart

……..the Russell 2000 small caps…..

Russell 2000 Chart
Russell 2000 Chart

……….and the NASDAQ………

NASDAQ Chart
NASDAQ Chart

I’ll confess here and now that I am positioned very aggressively on the bearish side. Thus, if we rocket higher on Monday, I will castigate myself for being too hasty and over-confident. And if we drop, I’ll applaud myself for being bold and daring. Same decision. Different conclusions.

As always, I take things one chart at a time. And I’ve got to tell you, setting aside the general market, all of my 43 bearish positions have absolutely dynamite charts. As our hero Jerome Powell might say, “I’m not even thinking about thinking about closing any of them.”

Major U.S. Futures: Line Limits
 

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Major U.S. Futures: Line Limits

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Comments (6)
THOMAS WHITE
TradeRunner64 May 24, 2022 12:46AM ET
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This guy, Tim Knight, puts his money where his mouth is.  While many are "calling" for a nice bounce, clearly, Tim is positioned, in a very big way, otherwise.  That's more guts than most people have.  If he's able to hold during the "fluctuations," I think he'll be right.  Because bear markets have quite a bit of time to play out, and the Fed is on a crusade to destroy demand...
Ashok Kuttan
Ashok Kuttan May 23, 2022 3:25AM ET
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you are going to be wrong. next 10% rally is to upside.
Gonçalo Coelho dos Santos
Gonçalo Coelho dos Santos May 23, 2022 2:30AM ET
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I like your posts. They seem authentic and you have the guts to say what you think or what your positions are going forward, unlike others. It also helps me understand the bear mentality, since I am mostly on the opposite side.
Joao Abo-gaux
Joao Abo-gaux May 23, 2022 1:05AM ET
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In a downtrend the market usually opens higher on monday so….
William Bailey
William Bailey May 23, 2022 1:02AM ET
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Fed still buying bonds and adding to inflation … while pretending they care about wage earners, they certainly dont! But, without full blown 1 trillion-a-month printing directly into the greedy veins of wallstreet the trend will be down for quite some time
Gershom Zvi
Gershom Zvi May 23, 2022 12:56AM ET
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Biden’s market will stay the same till the end of dems term
 
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