JRM Monday Market Update (From this am) – JenkinsRM

JRM Monday Market Update (From this am)

This is a post from an earlier video today we published for our trading community….

Here’s a text breakdown of the above video as well:

In a previous note, we analysed the cycles that were playing out with the S&P 500 and examined several 8.6 counts that we like to pay particular attention to.  Today we note that we are presently on day 5 of the most recent count with the market so far unable to break below a key low we have also been watching.

S&P 500 e-mini Daily Chart

The red horizontal line on the daily chart above comes in around the 2616 level for the S&P 500.  This level marks the swing line lows and comes in near the bottom of the bands so it’s still the most important level to watch on the downside.

Interestingly, this same area is also where we find our Pi line and the bands on the 4-hour chart.  Implied volatility on this timeframe is still really low in the risk range.  We’ve gotten lower highs in stocks every time we have been in this zone.

S&P 500 emini Futures 4 Hour Chart

The Implied volatility discount for the S&P 500 was around 48 percent late last week, which is remarkable to see.  The market high from Friday becomes the near-term pivot and was made at the same time implied volatility neared its lowest level.

Similar story playing out with the Dow.  Still making higher lows, weekly cycle remains high, and price is being contained by the 200 MA on the daily chart which is pretty much right at 25,000.  The Pi line is just above that, in fact the market tagged Pi exactly on Friday, and we would expect getting above it to be very difficult.  We just need to start seeing some lower lows from here on the intermediate term.

The market failed around 24,070 in mid-December and couldn’t get above it for a week, so that is a big level and should provide support on the downside.  It’s also in the area of the bands on the daily timeframe.  Drilling down to the near-term, I have highlighted a few key support levels to watch.

Dow Futures emini 30min Chart

The dashed red line identifies the lows made last week, around 24,400.  You can then see the two key swing lows marked below that at 24,278 and 24,208 respectively.  Notice how these lows coincide with a touch of the Pi line in each instance.