ES Outside Day Down & Gold Futures

ES Futures

If you were following the market intraday then you know the ES daily futures made a new all-time high on the benign CPI report before the market opened. It got to about 5,708 which is very near the Fibonacci resistance of 5,701 which is the level of 0.618 x net [ i to iii ] on the chart below.

Then, even before the cash market opened, price began to fall off - slowly - and then picked up some steam as the session wore on. Although the cash market made a new all-time-high, too, it did not extend to the length that the futures did. As the day progressed, the futures created an outside day down from the highest level - or a key reversal day. But the swing line is still mixed, the daily bias is still up, the daily slow stochastic is still embedded, and there is now a signal candle which requires significant downside follow-through for confirmation. Therefore, the high of the outside candle should not be taken out within the next two trading sessions or else it constitutes a trap for the bears.

Of note, we stated that we were running out of degree labels for extensions. We had gotten down to Minor, minute, minuette, subminuette, micro, sub-micro and even nano. From the degree perspective the up wave is about out of options (no pun intended). Even so, we urge continue caution and patience as price is still above the 18-day SMA and a significant retrace wave (..or more ..) is still possible.

Gold

As far as I can tell, the situation in Gold futures looks like this on the daily chart. I won't elaborate except to say that both a second wave and a fourth wave correction are clearly visible on the Elliott Wave Oscillator.

GOLD Futures - Daily - Fourth Wave Likely

Further, one should look for alternation from this wave, and wave Minor 4 should either be a triangle or a Flat wave with an equal or higher 'b' wave. It is the fourth wave conundrum at every degree of trend.

Have an excellent rest of the evening,

TraderJoe