All Hail ..

Machines and Buy-Backs. Information from various sources reports that the low volume, nearly straight-up rise since the outside-day-up on 08 August is largely corporations buying back their stock before the window closes again. And, if you have followed my paraphrase of Ira Epstein's Guidelines for trading you have seen several things play out as noted on the daily ES chart, below.

ES Futures - Daily - Swing Line Up

Items that have played out according to Ira's Guidelines (provided here back in 2015 at this LINK).

• Jul 15th: Do Not Buy new here against the upper daily Bollinger Band
• Aug 5th - 8th: Do Not Sell new here against the lower daily Bollinger Band
• Aug 7th: High of Outside Day Down (ODD) should not be taken out or it's a trap for the bears
• Aug 8th: High of prior ODD taken out by outside day up; trap for bears sprung
• Aug 13th: Price closes above 18-day SMA setting the bias and the swing-line UP.
• Aug 15th: Daily Slow Stochastic (DSS) over-bought only.
• Aug 19th: Only first day of DSS embedding. Needs two more days.

Note, too, that every single day since the outside-day-up a higher-low day followed. From then 'till now, there was no lower low day to allow less risky entries into the trend. Thus, the machines have done their duty buying back the corporate stock. A question now might be, "what now from here?"

Well, I think the best answer is the one Ira typically provides. That is, "with an over-bought stochastic and price nearing the upper band, I'll just let someone else own it here. After all, price only tends to close outside of the bands only ~5% of the time. That is until or unless it embeds - which it has not done yet."

It is my hope that providing this near real-time summary - with comments made by this blog at the time - can help provide some appreciation for the power of his guidelines.

Now from an Elliott Wave perspective, it matters to the count whether it closes over the top or not. So, we watch closely and see what we can see.

One thing we can see - because we're not blind - is just how close in proximity a new all-time high might come in relative to the timing of a political convention. That's just a coincidence, right? It's not like the President might have called up the PPT (Plunge Protection Team) with a message like, "Hey, Japan's threat to raise interest rates might destabilize our markets. See what you can do about that." Nothing overtly political, right? If you're in a bridge-buying mood, I'm selling - bridges that is. 

Have an excellent start to the evening,

TraderJoe