Tuesday, July 23, 2024

ES Morning Update October 27th 2016


What a wild day yesterday was!  While we did finally see the move up to the 2138-2140 range it dropped just as quick and then reversed again to rally up with a slightly lower high then the first burst up.  After that it calmed down and just drifted lower into the close leaving me clueless as for what to expect for today.  The head and shoulder pattern formed stood out like a sore thumb therefore I did not believe it would be that simple.  But, didn't see anything supporting some strong move up either.  I went into today neutral with no preferred or expected direction.

Ok, so here we are this morning and the market decided to go up, which really shouldn't be any big surprise as we all know they are keeping this pig up in this range until after the election... but it wasn't something I could see in the charts yesterday.  Anyway, once again the bulls seem to be making a run for the falling trendline that's stopped them so many times since the high of 2182 back on 9/8 before the big drop.  I don't foresee them getting through it on this attempt either but I won't rule it out before the election as next week we have the FOMC meeting which I'd think they will use as fuel to do a quick squeeze up the week before they crown Krooked Killary or Crazy Donald as the next puppet.  Of course they plan to rig the elections for Killary but I think the market will fall right afterwards regardless of the winner.

For today I don't see any trades as (again) the biggest move seems to have happened afterhours/premarket.  What I expect is a slow grind up all day into that 2150 range of resistance from various trendlines meeting.  And if the charts setup the way I think they will (meaning very overbought by the close) then we could have a very nice setup for a short by the end of today.  This move up is NOT supported by the SPX Cash charts and they want to go down.

This is just some short term re-alignment (point up) of the small time frames on the 60 minute charts of both the spx and futures.  The daily, weekly and monthly charts want to rollover.  What's needed today for Friday to go down is a move up just high enough to take out some stops the bears have just over 2150 or so.  If we can see that going into the close and the short term chart realign back to bearish then we might see a good short into Friday.  Of course it's early now and I can only guess at where the charts should be by the close today so I won't know until then, but for now that's what I'm thinking will happen.

Do note though guys, even after a move down on Friday (if it does setup that way by the close today) I don't see them breaking the 2100 level before the election.  Any move down could just be blamed on a little fear from traders not knowing what the Fed's will say next week at the FOMC meeting, which as we've seen many times happen.  They tend to drop in front of the meetings and then rally after them.

This possible pullback on Friday (possibly into Monday/Tuesday) could be the last move down before they rally up through overhead resistance and make a run for a double top going into the election.  So for now I'm looking for a grind up into the close with the goal of the 2150 area being tagged and pierced a little to take out some stops.  Then later today we'll see what the close gives us with chart alignments and go from there.

Author: Red

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