Monday, June 24, 2024

ES Morning Update June 22nd 2016


Futures just chopping sideways with no clear direction

MACD's are flat-lining on most all time frames... again giving no clear direction

Not much to say today as there's nothing the charts to give me higher odds of the market going one direction or the other. Might as well flip a coin and call heads or tails as that's about the odds we have now. But, from a "thinking like SkyNet" point of view this sideways action usually is done to confuse both bulls and bears and get them to take a position where SkyNet can squeeze the out of before the next real directional move. It's a triangle pattern and those can break either way but usually they are a continuation move, and since we've been rallying from the 2040 recent low the breakout should be to the upside. You can also call it a pennant flag, which is has the same results as a bull flag.

That's the technical side... now what do I feel will happen? I think the market is waiting on the outcome of the BREXIT vote, which happens Thursday but we won't know the results until Friday. So until then the market is just doing a whole lot of nothing. The way I'm thinking it will play out is based on what they plan the vote to be. Since we know "they" will rig the system to give them the outcome they want we should see it in the market ahead of time. If they rally up into late Thursday's and close the gap on the SPX cash from 6/9 (2115) then we should expect them to leave the EU and a gap down on Friday from it. If they don't rally up much at all and just continue this chop into Thursday leaving everyone guessing then the vote should have them staying in the EU and we'll see a gap up on Friday to close the gap.

What happens after the gap closes you ask? Well, as most all "Buy the rumor, Sell the news" events play out... the market will roll over and start going down. It shouldn't drop as hard or far if the vote has them staying in the EU as opposed to leaving, but never the less the market should start moving down next week after any gap up on Friday (and of course after a gap down) as the event will pass and the charts will take hold, and they say we are overbought and should pullback for at least a week or more. I'll be looking closely at the close on Thursday to decide on how to trade it. There's NO guarantee they will close that gap, that's just speculation on my part based on how close we already are from it right now.

Author: Red

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