Ground and Pound!!!
Love the MMA contests when they get into the Ground and Pound moments, hence the title here. The British Pound appears to be setup nicely for a decline. Above in the weekly chart we can see the commercials have been selling this rally. Again as we have learned brutally this year, this can mean virtually nothing just on it's own and can actually support a bull trend.
However, it is happening right at a time when the seasonal high is coming due, and also at a time when there is excessive bullishness in sentiment measurements. Also if you look at the daily pattern on a comparative basis, this with the exception of Fity Cent ( my new name for the dollar ), it is the weakest currency by far. I always went to sell the weak and buy the strong in any complex of futures.
One other thing to note here is that the commercials have a similar net postion now to the last level where declines occured from. As a result, this market is very nicely setup to decline. The daily chart below is next.
We also have the shorter term oscillators confirming a downtrend here so on this bounce we need to look for a break of the mini uptrend to enter the short side. I have one possible entry for tomorrow indicated, there are obviously other ways of entering. As long as stocks remain strong this is also being lifted to some degree.
We are likely heading at least for 1122 in the S&P, possibly higher. As a result this is on my list everyday for when the time comes when stocks stop lifting everything. I have no idea when that will happen as quite frankly since I have been trading I have never seen anything quite like what is happening overall now. As a result there is nothing to research to see what occurred last time, this has never happened before as far as I can tell.
I do think we are on borrowed time here but as long as the volume stays light which it likely will during the holidays, it is very easy for the PPT to stop any declines with futures buy programs. So, in line with that I expect stocks to hold up through the end of the year. However, the reason I have warned about new longs here is the huge selling in NAZ futures by commercials is at some point going to matter. I do think soon.