Today the ES daily futures made an outside key reversal day down. It made the highest of the recovery, then, after touching the R1 pivot point and finding resistance at it, made a lower low than the prior day and closed lower. In doing so, price traveled down through the Daily Pivot, PP, and the S1 pivot, and tried to stretch down to the 3,210 S2 pivot but couldn't quite make it on this stab.
|ES Futures - Daily - Outside Day|
As shown on the chart, the preliminary advance and decline statistics were not that impressive for a down day - almost even on the NYSE and the NASDAQ couldn't quite get to even 1 to 2, advancing to declining. Some people say we are crashing. Yesterday, the NYSE advance-decline line made a new all-time high. In the news background, there was some bickering about how much free money to give away, and some regulatory concerns regarding Apple. At the futures settlement, they were still trading above the 18-day SMA, and the daily slow stochastic had not quite lost it's embedded status although it flirted with it all day.
Today's down wave overlapped the minute ((y)) wave of Minor B, but not the minute ((w)) wave yet. That step would be needed as the first step in a three-step confirmation of the Minor C wave of Intermediate (X) being underway. The confirmation process was covered in yesterday's post if you missed it. From an internal wave count perspective, this wave would look a lot better as a five-wave sequence if there is a lower low tomorrow.
Then, if that occurs, one should watch any retrace on this wave if it happens. In general, the high of an outside day up should not be taken out in the next two days or else it constitutes a trap for the bears.
Are we due for real turn lower? Today I produced this chart without wave labels, looking at cycles and Fibonacci number of trading days.
|ES Futures - Daily - Cycles|
Today was day 85 since the March 23rd low. It is getting very close to a Fibonacci 89 number of trading days. The cycles are not exact, it is likely the number of trading days won't be either. But it is something to be on the watch for.
Well, have a very good start to your evening.