ES Morning Update January 15th, 2016
Posted: 15 Jan 2016 09:53 AM PST
The futures couldn’t hold the rally yesterday as you can see they tanked again this morning. I was thinking that because it was option expiration day that they would hold the market up today and save this move down for Monday. But the bulls just can’t seem to hold anything right now.
Chartwise we were overbought on the 60 minute MACD’s yesterday and getting there on the 2 hour chart. The 4 hour and 6 hour still had room to go on the upside at that point.
My thoughts were one of two scenario’s… one, that we’d see the 60 minute chart rollover today and reset for another move up later in the day if it pullbacked small at the open. Or two, I thought they extend it up into even more overbought territory and start the rollover later in the day.
Neither happened as obviously they have different plans. Rollover afterhours and premarket and wiping out every bulls that went long yesterday seems to be the plan. They squeezed the bears with the rally yesterday and now the bulls.
What’s next? Odds are there wasn’t many bears taking a short yesterday after the squeeze, so that means we could continue falling all day if they want. Not saying we are going to crash today but it’s pretty ugly right now before the open.
At this point I don’t have a clear direction. I was expecting the rally yesterday as the charts suggested that, but this morning we are mixed. I certainly can’t see another huge rally again like from yesterday, but it’s possible they retrace some of this early move down. But let’s face it… huge gap downs like this catch the bears off guard and bounces are usually weak because the bears want to short them and the trapped bulls want out.
So I don’t expect much of a rally “if” we have any at all? Best to just sit today out I think as I have no edge to see where we are going. Markets closed Monday for Martin Luther King Jr. holiday, so have a good weekend.
ES Morning Update January 14th, 2016
Posted: 14 Jan 2016 09:59 AM PST
Yesterday I thought we would rollover either that day or today (Thursday) for a B wave down. I thought it would be 20-30 points instead of the 5-10 points from prior pullbacks last year as I see us in a bear market now with more downward pressure on the market then in the past.
I thought we might hit the falling trendline of resistance before rolling over but it couldn’t make it and rolled over at the open.
This 60 minute chart got massively oversold yesterday and is now pointing up strongly. The 2hr, 4hr, and 6hr are also pointing up, and should support the 60, allowing it to go up past the zero level on this move up today.
My thoughts are that we’ll rally today as I do think the move down yesterday wiped out all the bulls looking for the same ABC rally that I was. Resistance will be at yesterday’s high around the 1940 area, and that will probably meet that falling trendline at the same time. I doubt if it gets through it today. That would be your exit for anyone going long. But at the open we could “should” see some pullback as trapped bulls from yesterday bail from this small move up. We could see a retest of the premarket lows, but I wouldn’t bet on it. Considering that the wiped out all the bulls yesterday the market is fully loaded with bears now and the best moves up from oversold conditions don’t do a backtest, and instead just squeeze the bears all day long. On another note, while I think one should exit at that resistance zone around 1940 I wouldn’t flip to short again as we could chop sideways at that area and continue the bear squeeze up tomorrow.
ES Morning Update January 13th, 2016
Posted: 13 Jan 2016 10:27 AM PST
C wave target next week?
Possible point to hit and then rollover is this falling trendline around 1960.
This 4 hour chart shows the MACD’s up near the zero level, so we could see another pullback soon.
Maybe not today, but by Thursday I think this will rollover as the 6 hour chart hits the zero area (it’s at -7.5 to .15 now). The 2 hour chart is at +3.5 to +5 right now and running out of momentum. The 60 minute MACD is already extended reaching +5 area, rolling over, and trying to go back up now.
My thoughts are that eventhough we are oversold on many timeframes there isn’t likely to be another straight up bear squeeze with few pullbacks like in the past. The short term time frames are going to be overbought between the open today and sometime Thursday (that’s from the 60 minute up to the 6 hour).
This suggests that we’ll see some good pullbacks each time the short term gets overbought as the daily and weekly charts still put a lot of downward pressure on the market. So when a resistance level is hit and the market rolls the moves down should be deeper then the ones in the past where we only saw 5-10 point pullbacks.
I’m not sure if we are really to break the low from Monday on any pullback this week, as I think we’ll just put in a “higher low” and then turn back up early next week for another rally attempt. So from a wave count the move up so far is likely some kind of A wave up with another scary B wave down to start either today or Thursday… followed by a C wave up next week.
But again, this market is very likely in a bear market now and even if that C wave up next week looks strong and powerful, like it’s going to breakout to a new high, odds are very good that it will only put in lower high and then take an even bigger move down into the end of January. We could see 2000-2020 by the end of the C wave next week I guess.
ES Morning Update January 11th, 2016
Posted: 11 Jan 2016 10:33 AM PST
Should roll back down at some point today and make a “higher low” while the market makes a “lower low” or a double bottom retest.
The Futures gapped down Sunday night to break 1900 and are now rebounding this Monday morning. This first rally should NOT hold and will likely be sold. We are still looking for the FP on the SPY to be hit and until it is I don’t see any big rallies. I’m not sure when it will be hit of course but today would be ideal… of course we sheep don’t always get want we want, but odds are good for the futures to retest the overnight lows at some point during normal market hours. If they did so, then it should come close enough to the FP to fulfill it.
ES Morning Update January 8th, 2016
Posted: 08 Jan 2016 10:42 AM PST
There are 2 falling trendlines of resistance.
And 2 horizontal trendlines.
This 60 minute chart of the ES Futures is already up at the zero line, using most of it’s energy overnight to rally the market up. The 2 hour, 4 hour and 6 hour at -5, -13, and -18 so they will add support for this 60 minute chart should it rollover today.
My thoughts are that we’ll hold the rally up today and NOT go back down to make a lower low. However, there’s been a lot of technical damage for the bulls as the daily and weekly charts are still bearish and will add downward pressure again next week. We could easily see another down move on Monday, that could take us to the FP level on the SPY.
I guess it depends on how high this rally goes? It’s trying to break the first level of resistance from the falling trendline, and did pierce it earlier this morning. Odds say it will get through it today but we could see some early selling at the open from trapped bulls first. But I don’t think the early selling will make any lower low… it probably won’t even go red.
Then I think we could see it rally back up later in the day to recapture the premarket high, and maybe more. I think we are heading toward that other falling trendline that’s coming in around 1995 in this chart, but we might not see it until Monday morning, and it will be lower then.
If you look back at January 19th, 2010 to the low on February 5th, 2010 I think we could follow a similar pattern. Meaning we stop short of the the FP low yesterday (comparable to 01/29/2010) then rally for a few days before dropping again for the final low. Of course it won’t follow exactly but the point is that the low is very likely NOT in yet.
So, let’s look for some early morning selling that doesn’t break yesterday’s low. Then after a few hours in the morning the selling pressure should dry up and then we might see the late day “Friday rally” happen…. maybe around noon? Not sure? But we should close up today.
ES Morning Update January 7th, 2016
Posted: 07 Jan 2016 10:49 AM PST
Not much to say here. Markets continue down without much of any bounce. At this point we just need to wait until the FP on the SPY is hit as that should be the bottom. If we continue down at this rate of speed we could hit the FP on Friday or Monday at the latest. My turn date of the 9th (+/- a day or so) is obviously going to be a bottom now and not at top as I previously thought might happen.
This also means that the low I was expecting toward the end of February could flip to a high instead. Not positive on that, but it’s looking likely right now. That would then flip February from a rally month to a selloff month.