Futures Go Where No One Has Gone Before

Market Outlook: Expecting Higher Volatility
Market Indexes: Major U.S. Equity Indexes were lower
SPX Candle: Lower High, Higher Low, Lower Close - Inside Candle (Harami)
FED Posture: Quantitative Tightening (QT) 

Early Sunday night there was some left-over buying from Friday's rally, and the futures opened up higher and made new all-time-highs. When the cash market opened in the morning, however, futures had surrendered all of the overnight gains, and cash opened lower.

The market as measured by the S&P500 Index zigzagged back and forth lower throughout the day, and settled with a loss of -19.53 points. In doing so, they left a daily gap above the current market location. Apparently, the market clearly knows that 2.618 Fibonacci extension we wrote about on Friday and Sunday is there.

Although there was some modest point loss, going along with our expectation of increased volatility, there is no damage to the up trend pattern yet, nor a confirmation that a down trend has begun, nor a significant trend line break. There is still a possibility this see-saw is part of a fourth wave - especially with the Fed meeting, and the employment report this week - or part of a fifth wave in progress.

The daily slow stochastic of the ES E-Mini futures is still embedded over the 80 level, but, interestingly, even with the overnight pop, prices failed, so far, to make their target of the upper Bollinger Band.

This is where things get tricky. It's worth watching for any lower daily lows, and we will try to make sense of them as best as possible. So, patience and flexibility are still needed.

Have a good evening, and a good start to the week.
TraderJoe