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.
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| 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.
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| 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.
TraderJoe
IMHO, you can take the failure to break 3100 to the bank. Amazing how prescient price action around these round number levels has been. Joe's scenario of a b down, c up is right on track, and cash should ultimately also notch a new high as ES already has. Exquisite bear trap!
ReplyDeleteYou think?
DeleteThanks, Joe.
ReplyDeleteI have a question about wave degree. Would it allow a second wave longer in time than the first wave of the same degree?
Yes.
DeleteThanks!
DeleteES overnight low 3101.62 adds weight to possible corrective b down. The 3100 round number is being defended successfully so far, which means despite appearance, CBs remain in control. An impulsive break of both 3100 AND 3000 in the cash session says otherwise, and that we have a likely top.
ReplyDeleteFalling wedge on yen since Aug broke out. Bodes well for gold too.
ReplyDeleteSo, as an impulse with such a short 2, then 1 would be the extended wave, and wave 3 should not trade below 3,072. As an a-b-c, it could drop below 3,072.
ReplyDeletehttps://invst.ly/owlb2
TJ
Can only measure now as c = a.
Deletehttps://invst.ly/owlgl
TJ
Think gold busted out of triangle for last move of b of y on 2hr.
ReplyDeleteShort term: there can now be a one-minute running triangle that looks like this:
ReplyDeletehttps://invst.ly/owngj
Might lead to a new low.
TJ
Yep!
DeleteLooks like a fourth wave.
Lower VIX higher on lower index low will signal an interim bottom of some sort.
Any upward move that re-claims 3100 will suggest new highs ahead imho...
Status of potential triangle, which must form properly in every detail:
Deletehttps://invst.ly/ownxq
TJ
Looks very good to me, with classic more complex C wave...
DeletePotential triangle still holding, as follows.
Deletehttps://invst.ly/owogh
Only alternate I can see (upward) would be some sort of diagonal, but not until or unless higher local highs.
TJ
There is now a higher local high. Need to on watch for something else.
Deleteindices flying bear flags...
ReplyDeleteNow looking for 1) leading diagonal 'a' wave from the low, or 2) double combination. Not at the workstation at the moment so can't yet tell if there is an update degree violation, yet. Might be in time if not price.
ReplyDeleteLooks like move up to test gap...
ReplyDeleteClosest most bearish count looks to be doing C of running flat with B at low of 3069. Should not go above about 3100 if true.
ReplyDeletesee reply below @ 2:39 pm
DeleteWith 2 nearly equal waves down, with a relatively shallow 4th, possible extended 5th down? (measure of 1-3 x 1.00 projected from 4)
ReplyDeleteIf extended fifth, we should break 3000 on next move down...and that would be signal imho...
DeleteI think I stated that incorrectly. I believe the measure would be 1-3 x 1.618 from 4). Perhaps someone can check me on that.
DeleteC that is possible, with the 5-min chart being an expanding diagonal; regardless even if the pattern has no eye-appeal to me, it has the right measurements in time and price. They 'are' getting tiresome, however.
ReplyDeletehttps://invst.ly/owrd7
TJ
The expanding diagonal does not have to be ending, it could be a leading 'a' wave of a larger upward correction too. Either one might work.
DeleteYes, all this leaves the door open for a ii/X that busts the 0-2 trend line, as usual.
Deletefyi only ..this upward correction is already larger in price than the one from 10:00 to 14:45 yesterday. That doesn't definitely rule anything out, just yet.
DeleteChris Ciovacco has an interesting take on the current equity fund outflows...
ReplyDeletehttps://www.investing.com/analysis/rare-equityfund-outflows-200489630
https://imgur.com/Qqx2AJV
ReplyDeleteThanks , my thoughts too.
DeleteThanks to you both.
ReplyDeleteA new post has been started for the next day.
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ReplyDelete