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John Carter: Futures Outlook, NKE, E-Mini Dow

With Alcoa (AA) no longer part of the Dow Jones Industrial Average traders began looking to Nike (NKE) for clues on what to expect from the coming earning's season. The company reported $0.86 per share on Thursday afternoon against an estimated $0.78 pushing prices to a current high of $74.87 in afterhours trading. That's all well and good, but what does that have to do with futures analysis?
NKE Weekly
Source: thinkorswim

My trading is primarily focused on technicals, and the signal that preceded NKE run into earnings is also present in the Dow. Both of these charts are using weekly timeframes, so this is a broad analysis but the Squeeze shown in each is a measure of contraction and expansion of volatility. Markets can only stay range bound for so long and when the do finally release that pent up energy we see moves like NKE has had starting back in August. With Nike now carrying some weight in the index I think this strength will result in a similar signal in the Dow, potentially carrying us up into 15800 then 16000. It's tricky to establish new positions after quadruple witching, but I'm looking at pullbacks as buying opportunies and at the very least, don't try calling the top any time soon.
YM Weekly
Source: thinkorswim


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John can be followed on Twitter at twitter.com/johnfcarter

 
At the time of publication, John Carter held no positions in the stocks or issues mentioned.

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SYM TRADE IT LAST %CHG
AA $9.41 0.00%
NKE $112.50 0.00%
AAPL $113.29 0.00%
FB $91.01 0.00%
GOOG $630.38 0.00%

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

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