The Bias

Two days ago, in the post at this LINK we proposed a way via an Elliott wave count that prices could decline on the FOMC report out and then recover to a great extent. Today they did that. The ES daily futures chart for December lead month contract is below. The FOMC did, by the way, cut the FED Funds rate by 1/4%.

ES Futures - Daily - Hanging Man

The importance of the chart remains that price could not get down to or close below the 18-day MA so the daily bias remains up. The daily slow stochastic is still embedded, so, on substantial breaks, like today, it is expected the Smart Money would deploy some new money, and they appear to have done that by the size of the tail they left. Yes, this is a hanging-man candle, but like all single-candle patterns, then confirmation candles are required.

It is not until the red line of the slow stochastic closes under 79 that price might be expected to start down to that "line in the sand" in earnest.

While it's nice to have an FOMC meeting out of the way, the next item is the reaction to the rates cuts as the sun travels around the globe and the reaction to it in other countries is seen.

So, it is possible that higher highs are made. It is also getting increasingly risky to rely on just the assumption that such will continue. Not only is the wave structure almost fully mature, but the distance between price and the longer 200-day moving average is also getting quite extended.

Have an excellent start to the evening,

TraderJoe