Thursday, April 4, 2024

Double-Close Key Reversal and More

ES prices traded higher overnight, then - depending on the index (like the DJIA) - they either immediately reversed from the open, or in the case of SPY / ES, made one more new high before reversing. Based on ES futures, prices then traded down through the prior two day's closes and look to close lower as of the cash close. The reversal, closing below two prior daily closes is known as a "double-close key reversal". Sounds ominous. The ES daily chart is below.


The market (likely) was emptying out in front of the Payroll Report tomorrow where some additional volatility could occur.

The other item of note is that the "swing line" indicator signaled a down trend the way that Ira Epstein recommends this indicator be used. To do this, there must be a lower low below a lower high, but - in addition - there must be a close below the 18-day SMA. Assuming the futures market closes somewhere in this area that will likely happen as well.

If so, then the daily bias switches to "lower" for the first time in a very long time. I personally would like to see a tag of the lower daily Bollinger Band, and the undercut of the 5,167 level so as to trade below the low of the fourth wave triangle we counted out in real time. That would increase the confidence that the minute ⓒ wave of the Minor Y wave of the Intermediate wave (3) is completed.

Have an excellent start to the evening,

TraderJoe

17 comments:

  1. Thanks TJ, Of interest to me is the Russell 2K. In the futures it looks to have completed a EDT and completed 1 down,2 up and now in a W3 down. The base of the EDT is about 1907, which is a ways down. Good luck to all.

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  2. if you think this was a sell off in response to nfp tomorrow and not kashkari you are not worthy

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    1. No. NK is a 'non-voting-member' who said 1 or 3 cuts. That is not new information. Who would listen to those jaws flapping? Meanwhile the Payroll Report is a blow-out number that provides new information. More than likely using "Big Data" and "A-I" some large firms can get pretty close to a good approximation and they "front-ran" it. Just like Baron Rothschild and the pigeon carriers, it is the information advantage that provides the market advantage. I am very worthy.

      TJ

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    2. Do you believe that BLS is an honest broker? 😊

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    3. Always remember Crashkari and Paulson came up with 750 billion number on a five minute phone call.

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    4. of course. just because mester and kashkari spoke and 25 minutes later the sell off occurs on talks of no rate cuts. no coincidence what so ever. the market has never sold off in anticipation of a bad nfp since obama.

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  3. Slowly dawning on market participants that Powell has been blowing smoke up everyone's you-know-what...!

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  4. ES hourly: now back to the vicinity of the 18-day SMA and those prior opens/closes.
    TJ

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  5. Should finish a truncated C wave up today finishing wave 2 and then a 3rd wave down which should be a dinger.

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  6. Wild the C should be almost complete

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  7. On a 90 minute SPX cash chart there is a triple top with yesterday's rally going much lower than the previous low. So far today is a classic P rally. The phony rally usually retraces 62 to 66 pct of the prior decline. If this pattern plays out the SPX should decline from here and could surprise everyone in it's veracity.

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    1. yes you are correct. Maybe I'll just say the decline should be stronger than yesterday's. Thanks

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  8. SPY 5-min: if an expanding diagonal is forming, then SPY must trade below 516.66 to activate it.

    https://www.tradingview.com/x/iz2RfUz5/

    TJ

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  9. A new post is started for the next day.
    TJ

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  10. Sept ES https://www.tradingview.com/x/5SGPIr4a/
    Coming to another time pivot in First week of May. Fed Decision May 1. Putin will be sworn in for another term couple days later. Also "WHO Member States agreed to resume negotiations aimed at finalizing a pandemic agreement during 29 April to 10 May." WTF, will the US surrender to the world health organization. https://tinyurl.com/6ew657n4

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