On a weekly basis the cash VIX was soundly turned lower at the EMA-34, as per the chart below. If the VIX follows-through lower, it might be because the stock market as measured by the ES futures tries to retrace higher.
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| VIX Cash - Weekly - Wedge |
Let me be clear: lower lows for the ES are possible on the daily chart, but these lows might happen in a grinding fashion. Why is that? Because as the daily ES chart shows, below, prices have already tagged the lower daily Bollinger Band which offers some level of support, but this is often the place where the Smart Money takes some profits off the table.
Further price may be bouncing off the June highs from some support there, as well. Readers of this blog will want to try as an exercise drawing the local daily channel on the ES chart to see how close price is to the lower channel line.
A diagonal formation at the recent bottom to end the fifth wave or the 'b' wave of a Flat are possibilities at this time.
Have an excellent rest of the weekend.
TraderJoe
Thanks TJ. Do you think just by your experience that SPX can go back below 3500 this year. I have tried few long term ew counts and they suggest it is possible but my experience suggests that it is very difficult to bring the markets down 1000 points unless a war starts or geopolitical situation. Also never seen markets drop in presidential election year. Kindly guide.
ReplyDelete1) Don't judge the future by the past. Past things were what happened formerly. By definition if a set of events {A} happened in the past, then the set of events {B} that happens in the future, must, be different somehow, or else it would still be the past. For example, the FED was lowering rates in prior years, now they are raising them, etc. There is somehow a difference. 2) The next presidential election is 5 Nov 2024. That is 'more than' a year away (i.e. there are the often rude months of Sep/Oct 2023 in between), 3) There are wave counts that support going over the all-time-high again, and wave counts for a new low below the prior Oct low. A lot not only depends on U.S. businesses and consumers but watch out for further deterioration in China, Japan and EU, and/or further accidents in the banking system.
DeleteTJ
thanks Tj.
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ReplyDeleteTJ