ES Lower Low Day

The interesting features of today's daily ES futures chart are shown below. As most know in the after-hours last night a number of tech stocks were affected by earnings news. That contributed to a gap down in the cash markets. For the futures, it resulted in a lower low day, as below.

The lower low day turned the swing line lower and made a pattern of a lower low and lower high. The problem is that this pattern is still neutral as the pattern is over the 18-day moving average of closes. The bias is up until it isn't. But as we suggested one of the two futures gaps did close today.

Further, price got very near to that 18-day average, and almost tagged it, as the embedded status of the slow stochastic was lost today. The only day it can be gotten back (without rebuilding the whole three-day sequence) is tomorrow.

Another observation of this market one can make is that the New York Composite Index (NYA) did not make a higher high in mid-to-late October as did the indexes that include the Mag-7 stocks, as below.

This is a very telling intermarket divergence that should be respected until or unless it can be shown to be broken. This index has the classic look of a B wave that rises to 90 - 100% and has since headed lower.

Have an excellent start to the evening,

TraderJoe