Two Views

As we have discussed in several previous posts, it is possible to see the end of the Minor B wave upwards in the ES daily futures. Below are two views relevant to this daily structure. First is the Bollinger Band view.

ES Futures - Daily - Bollinger Bands

As can be seen, prices have traversed from the upper band through the "line in the sand" to the lower band, with lots of whipping in the middle. We have attempted to describe the hourly count in a previous post. Being at the lower band is 'often' (not always) a place where the smart money takes some profits off the table. And, the slow stochastic is already in over-sold territory.

Further, Monday is the first trading day of a new month and 'often' (not always) see the inflows from pension funds, 401k's, company bonus plans and dividend reinvestment schemes. So, a lot of backing-and-filling between the bands is possible. But, so is a gap lower on Sunday night.

Next, we'll look at one market view I prefer for the longer term analysis: the fractal view.

In this view, one can see that price is below the Alligator indicator for the first time since November of 2020. During the course of this week, price has beaten the two most-recent down fractals back in time. There are two more fractals which are roughly at the 3,650 and the 3,600 level which are the next most important. Why? This is because price would likely be entirely below the indicator at the time of such breaks: something which was not entirely true of the two most-recent breaks. 

One can also see that the daily Elliott Wave Oscillator both had a divergence at the high, and is red and declining at the moment. If these third & fourth fractals back are broken and the EWO also goes below the zero line, it would not be a good short term sign for market upside.

At this time, a Minor C wave down is still expected.

Have a good start to the evening.

TraderJoe