"Nothing Bullish on the Current Chart"

Over the last several days, we have been writing about how the ES futures had a downside bias because prices were closing below the 18-day SMA. The same occurred today. The daily bias remains lower. But then, too, today, prices closed in the lower quartile of their daily bar for the second day in a row. Ira often defines this as a downside breakout. Further, prices are pushing the lower daily Bollinger Band downward and outward. As we discussed yesterday and, in the comments, price has also broken both of the prior daily down (red) fractals, lower. In short, there are lower lows and lower highs.

This is all to say, "there is nothing bullish on the current chart". So, now, in recognition of the break of the prior lows, we can assign labels to the 18 Aug low and the 01 Sep high. But, because price has not broken the upward channel yet (see chart at this LINK), then we must maintain our objectivity and assign completely equivalent labels. This is just in recognition that a fourth wave could form at the lower channel boundary as a a-b-c wave down. These labels are to be read identically. That is, "It is the same as "a", as it is as "i" at the low, and it is the same as "b" as it is as "ii" at the high.

As price begins to move through equality below the 4,310 level, then we may gain a preference for one over the other. But not just yet. And one shouldn't care. If price moves lower, it moves lower. It could move through equality to 1.618 or 2.168. The count will become more apparent.

Right now, our job is just to try to utilize the downtrend, given the inevitable bounces.

Have a good start to the evening.

TraderJoe