US equity prices as measured by the ES daily futures made a higher high day today as in the chart, below. Prices got up very near to the 18-day SMA where they formed a triangle that we warned about in the comments for the prior post. The triangle was a barrier triangle and, often, these have a mediocre thrust out of them - because of the energy spent by the market to bust the barrier (or so the theory goes). This one did.
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| ES Futures - Daily - Some Rejection by the 18-day SMA |
Regardless, prices experienced some level of rejection near that average and backed off a bit. If this up wave, so far, is a three-way sequence, it suggests placing a wave-counting-stop above today's high. It's not that higher waves can't be made, but it would well mean there needs to be a different count applied whether it remains a three-wave sequence or somehow morphs into a five-wave-sequence.
Prices have closed below the 18-day average for four consecutive days, only meaning that the daily bias is still lower.
Have an excellent start to the evening,
TraderJoe
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