Thursday's bar on the ES futures was a small outside-range-day up. Price should not take out the low of an outside day up within two trading days or it might constitute a trap for the bulls. Well, Friday started out much higher, with prices up some 40 points from the prior close on reaction to news reports in the morning. When the cash market opened, the SPY cash price nicked out a very minor new all-time high, and then reversed. The reversal was to the full extent of that outside day up and undercut the low of that prior outside-day-up, but not the entire topping formation just yet. In addition to springing a possible trap for the bulls, this created yet another outside-day-down bar which was larger than the one made on June 20th. Once again, now the high of the outside reversal bar down should not be taken out in the next two trading sessions or else it becomes a trap for the bears.
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| ES Futures - Daily - Lost Embedded Status |
With the daily slow stochastic not embedded, the usual expectation is for price and the 18-day SMA to try to come together before a new high is made, which they are attempting to do. Notably, the ES futures did not make a new all-time-high. Whether this created a truncation failure or not remains to be seen. We reminded everyone that today was the last day of the month and the last day of the quarter. Monday would start the potential inflow cycle all over again. The question is whether there is enough gas in the tank to take out the high of the latest outside-day-down or not. So, we remain patient, calm and as flexible as possible on the daily timeframe. Clearly, price is in some whippy kind of a iv, v sequence. It is literally a matter of how it might finish - or whether it has already.
The weekly timeframe chart is below. Not much has changed since the last update. Of note, this week was an inside week and it formed yet another 'spinning top' weekly candle at the upper weekly Bollinger Band.
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| ES Futures - Weekly - Against Upper Band |
While we note that there is not yet good downside confirmation at this time, the inside week does have the potential to turn the swing-line lower temporarily (but not start a down trend, yet). The weekly slow stochastic remains embedded so it is possible the weekly Smart Money players may still try to find opportunities to press for the upper band again - like they did this week. Clearly this won't go on forever and we note that price has not been down to the lower band since October of 2023. We also noted previously, there were a Fibonacci 34 weekly candles to this week's high in the ES.
Because there was not a new monthly high in the ES the monthly chart remains unchanged and can be seen at this LINK.
The Cycle V chart remains the same and can be found HERE. Wave Intermediate (3) did obtain the new high required by this count.
Have an excellent rest of the weekend,
TraderJoe
Thanks for the eagle eye view. If the larger ED at cycle degree plays out, the 4th wave of one lesser degree is the Covid low, also the start of the potential ED. Some EW analysts, based on the top degree expect a multi-year bear market. A return to the Covid low in less time than it took to build the ED means a brutal arrival of the Bear. Have a great week-end all. Enjoying a break from the grind in Salzburg. I hear the beer and sausages are very gut! 😊
ReplyDeleteA possible double top in place and Monday will be telling if the market fails here. The ZB_F is at a critical juncture and a drop below 116 could spell higher rates to come. Also the Presidential election situation could change and that would be negative for the market in my opinion.
ReplyDeleteExcellent analysis TJ!
ReplyDeleteThank you for sharing your first-class work. 😊
Thanks Tj. https://www.bnnbloomberg.ca/jpmorgan-s-kolanovic-warns-s-p-500-will-plummet-23-by-year-end-1.2090868
ReplyDeleteI do think Paul Tudor Jones 28th day analog is in force. This pattern is so rare and the setup is in place for whatever it's worth. If Monday plays a role I think they sell into the inflow or we just gap down.
ReplyDeletehttps://i.postimg.cc/SRb1hGtZ/Screenshot-188.jpg
The YM_F chart from Friday. I'm sure this could be counted as a 3 down,but it is that last wave that dropped over 100 pts that to me looks separate from the rest of the waves down. Thanks TJ
ReplyDeletehttps://i.postimg.cc/DwjmL8q6/Screenshot-190.jpg
Look at all the corrective waves for the last year....they are slow to form and drag on and on......Seasonality is bullish until mid month.....maybe yes---maybe no.
Delete@458, but you 'simply can not have' a larger claimed smaller degree 'i' than the claimed larger degree '1'. It breaks the definition of 'degree'. Smaller degree waves 'must actually be' smaller than their larger degree counterparts. That's the definition of 'degree'. That's why I am suggesting only three waves at this point. 'Possible' the last drop is only the 'b' wave of a Flat, and there will be lower lows, but needs to be proved yet. TJ.
DeleteOk, patience. Thanks TJ
DeleteES 30-min: here is the updated intraday wave-counting-screen with Bollinger Bands, slow stochastic, 100-per MA, updated pivot points (classic calculation) and local fractals.
ReplyDeletehttps://www.tradingview.com/x/CsxZcj1w/
Reminder: today is the first trading day of a new month & quarter and could see inflows from the usual sources (company bonuses, 401k's, pension funds, dividend reinvestment schemes, etc.).
Note, there is already significant overlap on prior down waves. On Friday we were able to count either a-b-c down or the diagonal followed by a flat. The most critical item is whether the prior high is exceeded or not.
TJ
ES 30-min: 8 am is now an up (green) fractal, too.
Deletehttps://www.tradingview.com/x/KGXakhU4/
TJ
..now up over 8 AM up (green) fractal. TJ.
DeleteES 30-min: prior down (red) fractal broken, and new lower low. TJ.
DeleteA new post is started for the next day.
ReplyDeleteTJ