Monday, June 24, 2024

ES Morning Update July 16th 2018


I hope everyone had a great weekend. This week looks to me like it's going to put in some kind of top in the market and allow a decent pullback, which could last until the end of the month or early August. On a rising trendline (not shown here) I've drawn on another chart of the ES Futures it's pointing to the 2835-2840 area as "where" the current rally up should hit it. Of course that will be resistance when it does and could easily mark a pullback spot. But I'm not confident that it will get there this first trip back through 2800, as too many charts show negative divergences and overbought stochastic... and we've already had the "higher high" to create those conditions.

So we might not see much more then 2814, where a prior high was made back on March 13th of this year, before we rollover. Hard too say at this point but I really am not expecting that 2835-2840 area to be hit on this go-a-round. Probably today will be one of those "pause" days where it doesn't go up much or down, but fools everyone on both sides. That's about the best read I can get on it this morning. There is support at the rising blue trendline and if that breaks (I doubt it today) there's the green falling channel that is now merging with the rising light purple trendline. That is double support if it did drop there today... but again, I really doubt it. Over on the 6 hour chart the MACD's still have room to go on the upside, while this 60 minute chart is showing negative divergence.

My guess is we'll drift nowhere to slightly down in the first few hours of the day and turn back up with this 60 minute MACD. It's already at the zero line where turns are common but the 2 hour chart isn't quite there yet. I'd guess this 60 minute MACD will fall through the zero line a little while it wait on it's old brother (the 2 hour MACD) to reach zero and make a turn back up. Common times for this to happen are around the 11:30 am EST period when the European market closes. It's also lunch time in America so many traders will have finished up their position swapping and therefore the volume dries up... and the market floats up.

The point I'm trying to make is to NOT expect much today in either direction. I'm positioned short and would love a big drop but I'm not expecting it. If today does chop sideways then there could still be another move higher tomorrow to hit that prior high of 2814, and that's where I think the bulls will run out of energy. Of course there's nothing stating for sure that we are going up to that level as we might have already topped? Happy trading.

Author: Red

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