This is a Weekly Chart of the Dow basis June contract.
6 weeks in the past 13 we’ve tested 16400 and sold off. In my opinon, if we settle above 16,400, it opens the door to a run up to at least 17,000.
IN the mean time. Every time it comes close to 16,400 : I’d continue to sell it.
If you had done that in the past 3 months, you would have had a bunch of opportunities to scalp profits on the sell offs.
Is there a big sell off waiting in the wings? Sure. When will that happen? No one will get a phone call 3 hours before that happens. For now, trade this resistance and look to get out of the way if we settle aboe 16,400.
More and more money will be pouring into accounts in front of April 15th as people fund or top off their contributions for IRA accounts.
Its an easy sale now, after a 30% gain in 2013 and , as yet, no scary sell off to scare longs away. For that reason, I’d still be buying dips, looking for a good pop once we settle above 16,400.
make sure you use stops on your long futures, or use put options to protect potential black swan melt-down scenarios.
Below, is the same chart (weekly) for the S&P futures June contract:
