Today the algorithms spent most of the day doin'-the-deed after making a higher high before and after the cash open. So far, ES prices have backed up towards the prior price channel in a higher high day. But this does mark three daily closes below the lower parallel. The daily chart of the ES futures is below.
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| ES Futures - Daily - Higher High Day |
My understanding of Ira's swing-line indicator is that this has the effect of moving the swing-line up at least temporarily (as shown) but there is "no trend" established because there was a higher high followed by a lower low (yesterday's low) and because prices closed below the 18-day SMA in any case. A new lower low day - lower than yesterday's low - would be needed to begin a trend towards lower prices, provided the day does not turn out as an outside day up.
As things stands there was still no new upward overlap of concern on the intraday charts.
The daily slow stochastic remains in over-sold position, and the daily Bollinger Bands are narrowing which indicates at least some consolidation. Tomorrow morning is the PPI report before the market opens. Bumpy conditions can persist.
Have an excellent start to your evening.
TraderJoe
Thanks TJ,
ReplyDeleteBelow line in sand and above 3900 support. It should resolve soon.
ES 1-Hr: early this morning there was upward overlap. This and the position of the hourly RSI suggest this as the extended first wave down count.
ReplyDeletehttps://invst.ly/zsfbr
TJ
https://schrts.co/RRZGMeBJ
ReplyDeleteTLT - I think it’s probable we see a reversion to the mean (200 weekly) during a recession. Buying TLT on next pullback with a target of 134.
i often wonder why fast moves in either direction get bought or sold so heavily. Does it have anything to do with kind of wave it is? Does a fast move imply X or C? does it matter the speed of the wave when labeling?
ReplyDeleteRoberto, it really depends on the context one is dealing with: over-night or cash market. Try to remember, the over-night market volumes are extremely low. As this ES 5-min chart shows for today's move.
Deletehttps://www.tradingview.com/x/VOcVWUDn/
Sometimes a wave like this is explained by the "running of stops" by the news algorithms - with the common stop locations shown in red.
And as you can see from this second link, the volume on that wave was 'meh' relative to the volume bars before and after the opening bar.
https://www.tradingview.com/x/XN5BCSTc/
Given the light volume on the bar, one treats it 'warily' and just analyzes the wave situation until more information comes in. Remember, some wave analysts use 'cash only', and sometimes such waves don't even make new cash lows. Todays didn't; neither did it make a new futures low.
These are all signs that the spike wave is 'playground of the machines' - which is why Ira Epstein often says, "I don't take positions in front of major reports".
I know people are most interested in using wave counts for 'trading'. I get that. But the analyst's job is to 'analyze', and not necessarily to trade until things make some sense.
Hope this helps.
TJ
Thanks so much, yes this makes a lot of sense 🙏
DeleteHope everyone took advantage of the count I called on XLE! Be careful now, as an ending diagonal could be forming
ReplyDeleteSPY 15-min: per the above chart, the upward channel has now been broken lower.
ReplyDeletehttps://www.tradingview.com/x/xVrVQXL4/
TJ
Now the morning low has been exceeded lower.
Deletehttps://www.tradingview.com/x/WI6ue9Gg/
TJ
SPY 15-min: now the Wed-to-Thu gap-fill has been 'tied' but not overlapped, yet. Look at the red volume.
Deletehttps://www.tradingview.com/x/rw39b7lu/
Reminder: CPI scheduled for Tuesday.
TJ
ES 5-min: this is a good example where the 'wedge' - which 'looks like' a diagonal is not actually one, even though the upward wedge-shaped price pattern halted the upward movement. In this case, the pattern 'counts better' as a (w)-(x)-(y) where the (x) wave is a triangle. I counted the (x) wave triangle for myself, and it did work.
ReplyDeletehttps://www.tradingview.com/x/u6hp2owA/
As you can see, the start of the diagonal (no matter where you start it) was not exceeded lower in less time. Hence, I did not label the wedge today as a diagonal.
TJ
A new post is started for the next day.
ReplyDeleteTJ