Today was the end of the month and the end of the quarter. How long will they drag it out? We had a near-perfect Elliott Wave analysis today, including the suggestion of the 'front-running-of the-beginning-of-the-month-money'. No one apparently cared much. No one commented. No one charted. So, here's the chart we are left with at the end of the day.
The Principle of Equivalence tells us to be patient. To be cautious. We are so being, we are holding no overnight positions at this time. Although a further wave 5 can not travel below the low of wave 4, there might be some other clues like the EWO turning below the zero line again. There are definitely ways for prices to extend higher. So, we are again flexible, patient and cautious.
It will be interesting to see how much money is committed to the market tomorrow. And it will be interesting to see if any remaining downside gaps get filled.
Have an excellent rest of the evening, and possible start to your holiday week if you are going on vacation or taking some time off.
TraderJoe
Golsman sachs estimated significant equity ourflows for quarter end from pensions and ctas. Thanks
ReplyDeleteThx for the info. TJ.
DeleteThanks TJ,
ReplyDeleteIf we do in fact get the wave 5 ending diagonal, things could get very interesting!
TJ - just a simple question: why don't you show volume? Isn't that a good indicator of which wave we are in(4s have a lot less volume than 3s, for example)? Just curious
ReplyDeleteOne of the problems with volume - even on daily and higher charts - is that it can also decline during the middle of a trend. This is because a certain segment of the 'Smart Money' is already committed. They're not going to buy again. Then, in comes dopey retail for the latter stages of an advance, and the volume goes up again. Here is the recent ES daily, and its volume.
Deletehttps://www.tradingview.com/x/MFAQrUDH/
Note the places where price is still "movin' on up" but volume bars decline. Also, note the red volume 'spike' on 13 June. One would ordinarily think that it would indicate a newer down trend is in force. But it means just exactly the opposite. So, volume itself is a very tricky item to analyze. I would never base a market decision on a sole bar-to-bar volume analysis.
On the other hand, some volume indicators - like OBV, Chaikin Money Flow, or Money Flow Index can be helpful if/when they diverge at significant market turning points.
Then, during the day, we all know the ES volume is drastically different after the cash open versus the night session. So, that is hard to compare. Further, "dark pools" are not required to report to the consolidated tape until the close, so who knows what their volume means during the day.
Back to daily volume for a minute, volume also diminishes seasonally during the summer, and as major holidays approach. And these can often be times when prices move significantly because the machines just take over and grind it higher.
So, in summary, volume can be 'somewhat' useful at times. But it can also be misleading.
TJ
Do you consider DIX and GEX at all? SqueezeMetrics
DeleteSqueezeMetrics recommends DIX for monthly analysis, and they're not real clear on how to use it, though they seem 'sure' of what it means. They seem to want to adjust it by other measures, so why don't they just provide the metric that works rather than one that has to be adjusted? Beats me, but a little too complicated for the value-added, unless perhaps one is an options trader. TJ.
DeleteJust fyi - Chair Powell scheduled to speak as the cash markets open, as below, at 09:30 EDT..
ReplyDelete"ECB Forum Preview: World’s main central bankers expected to shed light on interest rates as uncertainty grows
Federal Reserve Chairman Jerome Powell participates in a policy panel with other central bankers at the ECB Forum on Central Banking 2025 in Sintra, Portugal."
TJ
Link to Chair Powell speech.
Deletehttps://www.cnbc.com/2025/07/01/fed-powell-ecb-panel-portugal.html
TJ
ES/SPY (CFD) 1-Hr: as of ~12:30 ET, the Principle of Equivalence allows consideration of two different three-wave structures. If higher highs are made, then a diagonal may wind up being more proportional. Right now, a triangle doesn't have great 78.6% legs.
ReplyDeletehttps://www.tradingview.com/x/WLnFqQs2/
The solid lines are for the diagonal. The dotted for the triangle. It's possible that prices could break lower for better triangle legs, but there is no good evidence for that at this time. Pattern is very sideways at the moment.
TJ
A new post is started for the next day.
ReplyDeleteTJ