ES Daily Candle: Lower High, Lower Low, Higher Close: Yin-Yang Candle
Market Posture: Neutral-to-negative and Probing Waves
Daily Swing Line: Down (Lower High, Lower Low)
Daily Bias: Neutral (Settle On 18-day SMA)
Overnight the ES futures were roughly unchanged within a range, and traded lower as the market opened - making a lower low day. From the 10 AM candle forward, prices traded higher in a wave we were able to count as a five-wave impulse, upward (See yesterday's comments, if interested).
|ES Futures - Daily - Higher Close|
Yesterday, we said that "fighting a battle at the 18-day SMA was always a possibility." Today was just that - a return to the 18-day SMA and a poke above it. As a result, we can now show the best alternate, IF the market has found an additional layer of support at today's low.
|ES Futures - Daily - Alternate for Z|
The second level of potential support is shown by the higher of the two dotted orange lines. If the high of yesterday's outside day down is exceeded, then the focus would turn to this second chart. If, instead, the market decides to put in a good gap down - and follows through - then the count on the first chart remains. Part of the reason we show this Z wave is that the SPY did make a new all-time-high in that ETF in mid-September. An additional wave up could close the gaps at the highs in the cash S&P500.
The market remains a very sloppy and news-driven affair. And wave counting remains difficult in that environment. It can be trying, and yet a flexible and calm approach can help one see the legitimate ruled-based alternates until a clear winner emerges.
Have a good start to your evening.