Dow Higher High

Today the Dow and its futures finally made that higher high wave upward to a new intraday high. Yay (for some reason)!  Meanwhile, back at the ES futures we were expecting a fourth wave down and a fifth wave up on the hourly chart, and we think we've gotten that. Here out of interest is a two-day chart of the ES futures with some potential Fibonacci timing points.

Tomorrow is Tuesday. No telling whether it will bring the fabled turn-around or not. Meanwhile, back at the daily ES chart (below), prices again hit the upper daily Bollinger Band at 4,414 (this morning) and pushed it out to 4,419 so it didn't hit it at the close.

ES Futures - Daily - Overbought

Meanwhile the daily slow stochastic is in over-bought territory and is not embedded. Again, to paraphrase Ira Epstein (a futures broker), "this is often a place where the so-called Smart Money takes some off the table. And new longs are not recommended over the upper band because the probability of staying outside of that band is about 5%, and the slow stochastic is not embedded".

The above is not trading or investment advice, just a paraphrase of what one commodities broker teaches. 

One can also see that price has again slammed into the upper resistance line from current rallies. I've been doing a little thinking about where the next foo-bah might come from in this market. Something that is relatively new is the concept of a sovereign wealth fund. Here is a definition.

What is the purpose of sovereign wealth funds?

The primary functions of a sovereign wealth fund are to stabilize the country's economy through diversification and to generate wealth for future generations. The emergence of sovereign wealth funds is an important development for international investing.

 

Here are five of the largest (source Wikipedia).

 

China                2.2 Trillion

UAE                  1.4 Trillion

Japan                1.4 Trillion

Norway               1.3 Trillion

Singapore            1.0 Trillion

That's roughly about $7 Trillion; isn't that 'about' the size of the FED's balance sheet? According to Barron's the FED's balance sheet this past week stood at $8.26 Trillion. As the Church-Lady would say, "isn't that convenient?!"

Have a good start to the evening.

TraderJoe