ES Futures LL, LH, LC

Today was a lower low, lower high and lower close making a swing-line down trend continuation for the time being, as per the ES futures daily chart, below.

ES Futures - Daily - LL LH LC

Today was also the third consecutive daily close below the lower Bollinger Band. This does tend to lower the odds to about 2-4% of the next close being below the band (not impossible - just lower odds).

Price is currently pushing the lower band down which might start or continue a more impulsive movement. And if this occurs the next target would be the combination of the roll-over contract gap and the 100-day MA (green crosses) which are in nearby locations.

Typically, with price along the lower band, it will either break down decisively, ride the band lower for several days or quickly decide to reverse to back inside the band. With such uncertainty of being under the band typically only 5% of the time, it is no wonder that the Smart Money often takes at least some profits here on their short positions from under the 18-day MA (red line), even if they decide to let some ride. 

But make no mistake, there is nothing bullish on the chart until/unless price closes back above the 18-day MA again. Taking profits is not the same as going long for the large sums involved in Smart Money positions.

The daily slow stochastic is over-sold and so it is a warning to the retail not to initiate naked new shorts here. If the daily slow stochastic is to embed it might start with a breakdown bar, but that - and its follow though bar - are not in evidence yet. This is not trading or investment advice. It is just a different way of saying what broker Ira Epstein says as follows: "Would I ever tell a client to put on a new short under a daily Bollinger Band? The answer is a plain, 'No. Not ever'."

You may have also noticed that some futures brokers are tightening up margin requirements ahead of the election and possibly the FED meeting. This is also likely thinning out volume a bit.

Have an excellent start to the evening,

TraderJoe