Back to the "Line-In-the-Sand"

Today, in the daily ES futures, is a good example of why the work of Ira Epstein is not to be ignored. Regardless of opinion, regardless of earnings reports, regardless of Elliott Wave counts and lower targets, the algorithms just took prices back to "The Line in the Sand", the 18-day SMA starting well before the FOMC report out. Here is the daily chart in the requested format.

In previous days we noted how the daily slow stochastic was over-sold, and concomitantly, how the Smart Money does not like to commit new funds against a band in just over-bought or over-sold conditions. And, even with some skunky tech earnings last night, prices staged quite a rally today - getting back to that declining 18-day SMA.

In the process, the swing-line indicator turned up, but this is negated by prices closing below the 18-day SMA, as Ira teaches. So, there is - as yet - no new trend established. And the daily slow stochastic is now working off an over-sold condition but is not fully there (i.e. is not fully above the 30 level) yet.

Yes, we see the gap on the futures chart, and we see the up (green) fractal from 23 Jul.  But as of the futures close, price was respecting both of those.

We'll see where we go from here. A couple of us have suggested a slightly truncated down count for a first wave. On the way up - particularly in early June and early July the 18-day SMA acted as significant support. The question now whether it will act as resistance on the way down.

Have an excellent start to the evening,

TraderJoe