I Need More ..

Today was a down day. After the last few days of horrible grind into the upper daily Bollinger Band on the ES futures contract - shown below - a down day when everyone is going gaga for higher prices is to be expected. We got one. So what? Was it interesting to see? Sure. But, if one is going to be "calm, patient, and flexible" on the way up, then the same must apply to down days. So, what are the measurements?

As of the cash close, the futures had only made an "equal low" to yesterday's bar. I don't want to be greedy but for a good down sequence to start we need to see much more than that. As you can see from the chart, the bar was not even a full-on "outside reversal candle". It didn't have a higher high, nor a lower low, yet (the futures are still trading as this is written).

Further, price is not below the 18-day SMA, "the-line-in-the-sand" and the daily slow stochastic is now embedded (using the classic calculation). The swing-line indicator still has a higher high. Now I realize the NQ and YM futures did have a lower daily low. Okey-Dokey. But they too are still above their respective 18-day SMAs also. The YM & NQ futures at least overlapped their prior high - making certain wave counts less possible. But the ES has not yet. Further, the advance-decline statistics were only about "dead-even" today - nowhere near kick-off or even impulsive territory. So, don't blame me if we are forming a larger triangle or diagonal (more about those, if needed, in later posts).

For now, if the 18-day SMAs are lost, and/or the slow stochastic loses the embedded status, then things might get a bit more definitive. Until then, as I suggested yesterday, new highs are getting much less dependable - merely because of where we are in the wave counts - and the overhead positions of the daily Bollinger Bands.

Have an excellent start to your evening,

TraderJoe