Tuesday, June 25, 2024

ES Morning Update May 11th 2016


Futures went through the falling trendline of resistance afterhours and has now fell back below it while riding the lower trendline of support in the rising channel.

MACD's got overbought on the 60 minute and 2 hour chart yesterday and have dropped since then.  The 4 hour and 6 hour have a little more room to go higher but they too are close to overbought.

Looking at all the charts I watch and studying this futures chart we should be on the last move up today before a pullback that will break that rising channel of support.  I'm not confident yet that this pullback will start any big down move as I don't think it will.  I think it will just be that move down into this Thursday/Friday for the usual low that commonly happens the week prior to the monthly options expiration (next week).  So today we should look for the futures to "try" and make a higher high then yesterday.  I give it 50/50 odds on that as we have a bear flag formed on it now while hanging on to that lower rising trendline in the rising channel.  I think we'll see it grind up that trendline early today, holding on for dear life, but I think it will break at some point today.

You can see how the MACD's had a high yesterday around +5 and are currently around the +1 zone, trying to turn back up.  They should make a lower high (maybe +2.5 to +3.0?) and then rollover allowing the futures to breakdown as well.  I'd again look to selling this move up today but not too heavily yet as we're likely just going to pullback into the end of this week.  Then the bulls will likely make another run back up early next week where I'll be looking to load the boat with bears.  Today the bulls will buy the early morning dip, and it may go make a slightly higher high?  Don't know for sure, but it certainly looks like some kind of final 5th wave up with the afterhours pullback being the wave 4 down and the squeeze up yesterday being the wave 3 up (or C wave?).  Regardless of the wave count my technicals say this should be the last wave up before a pullback happens.

How much of a pullback you ask?  Well, I really don't see much support until that choppy zone from the 9th where it went up and down many times between 2050 and 2060, so that would be my best guess for a target zone of this coming pullback.  After that the bulls should try again but I think that will happen next week.  Everyone seems to be bullish again as I look around the internet, so I'm going against the crowd here.  But that's just me, stubborn as "Stone Wall Jackson"!

Author: Red

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