Second Close Under the Band

Overnight initially gapped lower, traded lower for a few hours, as we suspected, and then there was a gradual but steady rise into about 7 AM eastern time. This was in keeping with the guidance that initiating new naked short positions under the band is fraught with risk. The turn-around in this case was 120+ ES points. Then from 7 AM forward, after prices were back inside the band, prices declined all the way back down to the overnight low and exceeded it a bit, as shown on ES daily chart below.

ES Futures - Daily - 2nd Close Below the Lower Band

Thus, there is now a second close under the band, dropping the odds to about 4 - 6% of the next close being outside of the band (not impossible, just lower odds). The regular calculation of the daily slow stochastic is still over-sold only and not yet embedded.

From an Elliott Wave perspective today appears to be some or all of a fourth wave. I lean more towards some because of the brevity of the wave, so far. Fourth waves tend to be malingerers. This one isn't yet.

Have an excellent start to the evening,

TraderJoe