An important message was delivered by the markets at quarter-end, as the major US averages (Dow 30, S&P 500, Nasdaq 100) closed at fresh Quarterly highs - the first new closing high from this timeframe since March 2012. This is a 'tell' for odds betting on future directional activity into the fall, as all market timeframes are synchronized and trending UP; Quarterly, Monthly, Weekly, Daily, Intraday (my regression indicator singal - as per trade 31 - long). These are the exact conditions a 'trend' trader/investor would look for - these are rare inter-timeframe alignments and could support a thesis of aggressive buying on pull backs into weekly lows, as per last week. As long all the Majors continue to find weekly support - maintaining weekly trending activity - then this thought process remains a valid scenario that could play out into October. The caveat will be how the market sets the tone in today's trading session for the month of October - and if today's session puts in a strong monthly reference point to trade from; whether we see a good high or low come in. Let's look closer at the charts below:
From the day chart reference above we can visualize all the strategic time-structure levels and boundaries to watch for --- meaningful activity will take the market 'outside' the weekly boundary: trade acceptance < 2775 would be perceived as bearish and > 2775 or > 2859 would be seen as bullish activity. We would also like to see the market find support at the old Quarterly high 2790 -- any rejection below this levels would be bearish, in conjunction with trade below the weekly low pivot (2775). The Nasdaq 100 failed to establish consecutive monthly up trend continuation from August, which does imply some hesitation from the major market trend level.
The intraday chart below shows the LE - 2814.25 (long entry - trade 31): this is where we get long the market, with a stop at 2770. And coming into the 1st trading day in October, we had some unusual overnight activity associated with euro-zone data (Unemployment/manufacturing PMI) that reversed the market sentiment -- this pours over into today's trading set-up. I wouldn't be surprised to see some early weakness off the open, but if the markets find support, then I would suspect to see some buying come back in. Friday's range is the first reference to watch for, as it was a 'Narrow Range' and 'Inside Day', representing indecision and contraction. Any market activity outside this range is the next thing to watch for. Our references are the time structures mentioned above and the 'Single Prints' which represent upside resistance -- if the market clears this area -- logically, we could see rotation back up to 2859 -- and if it struggle at 'Single Prints', rotation down to 2775.
