A Key Item

Here's a simple thing to watch tonight and tomorrow. Does the daily chart of the ES futures wind up losing the embedded slow stochastic or not? Already, it is wobbly and below 79.

ES Futures - Daily - %D less than 79

One key is tomorrow's close. If the %K, the red line of the lower indicator above, remains below 79 then it is possible a quick trip back to the 18-day SMA might occur. And recall broker Ira Epstein's caution that IFF the embedded reading is lost on the close tomorrow, Tuesday, the only way to get the reading back is if both numbers are over 80, again, on Wednesday, the next day after losing the reading. Otherwise, the slow stochastic would have to go through the whole three-day process of embedding again (assuming the market does not move substantially lower and prohibit that).

Tonight & tomorrow to gauge progress on that front one might also watch The Intraday Wave-Counting-Screen, shown below, which was created to be a more responsive guide on the ES 30-min chart.

Right now, things are sideways below the intraday 18-period. So, the short term is fighting with the long term a bit.

We addressed the EW count in the comments for the prior post. While a fourth wave became a little less likely with the down movement this morning, it was not ruled out. And a fourth wave triangle is still a possibility as we only counted three waves down. Trading above the R1 level tomorrow might indicate a triangle pattern is kicking in. But we are also keenly watching for downward overlap as we showed in the comments. So far, that hasn't happened yet.

And once again we are in a newsy market. So, give it the caution it deserves to help avoid being whiplashed.

Have an excellent rest of the evening,

TraderJoe