ES Daily Candle: Higher High, Lower Low, Lower Close: Outside Key Reversal (OKR) Day
Market Posture: Negative
Daily Swing Line: Neutral
Daily Bias: Up (Settle Above 18-day SMA)
Because of the differences in the way that the chart purveyor, below, accounts for the holidays there are some subtle differences between this chart and one based on the way the CME accounts for the holidays. In the CME chart, prices today settled above the 18-day SMA, not below it. Still, the essential ingredients are the same.
|ES Futures - Daily - Outside Key Reversal Day|
Regular readers will recall we said we expected the regular beginning-of-the-month inflows on Dec 2 which is the first trading day of the month. But, we didn't know if they would result in a new high or just a retrace wave. The new high did occur in last night's futures session, and the futures went on to make new all time highs. The new high did not happen in cash. In the futures, prices headed lower, tagged the 18-day SMA and went down to fill the previously open gap up in the futures from the Sunday night session on November 24th, now shown as the black cicle (Cash did not close it's gap as the session ended.)
Although it was the second largest down bar since the rise from October began, we don't want to make too much of it yet, as the advance decline ratio (without closing statistics yet) was still less than 1:4 which is not as impulsive as some 'kick-offs' are.
The primary purpose of the next chart is to show that the lower boundary of the daily channel we drew in the holiday posts is now being tested, and to show the divergences with the MACD involved at this time scale.
|ES Futures - 5 Hr - Lower Testing Channel|
Whether the channel breaks first or not, an upward retrace wave (at minimum) is expected at some point.
Because of the rather precise timing with which this down draft occurred, we want to remind readers of the possible daily count shown over the holiday. Use this LINK.
Have a good start to the evening and the week.