Thursday, June 13, 2024

ES Morning Update July 8th 2016


Rising trendline of resistance could be rode up early this morning

Rising trendline of support still isn't anywhere near breaking down

MACD's on this 60 minute chart could run up for at least half the day before getting overbought

Negative Divergences are setting up everywhere. Both on this ES Futures chart and the SPX cash.  This suggests a down move is coming after first tricking the bulls into going long to trap them.  Bears should not go to sleep here as a turn back down is very close.  Today's job data could very well end up being the "turn date"?  False breakouts are common near the end of a move and this looks a lot more like the end of a rally then the start of one.  The technical's just don't support the "Inverted Head and Shoulders" pattern that's formed now.  Many times these are false breakouts done to squeeze out the last bear and get the bulls fully long.  I think that's the case here too.

Looking at the breakthrough we just had from the jobs data news we've cleared out many bears that had their stops right above the horizontal resistance zone of 2100.  This doesn't mean we'll rollover right at the open as new bears will short it, and I wouldn't be surprised if we dipped some early on and then came back up later in the day to wipe-out today's bears as well.  SkyNet is very quick to adapt as we traders pick up on it's patterns, and as soon as we do it will change them.  Meaning the "short the gap up" move that used too work all the time in the past doesn't work as much today because so many people figured it out.  While taking a short up near the open for the bigger picture is still wise in my opinion we might get a better spot later in the day.

Layering in shorts is what I've had to do over the last year as we are in a very, very manipulated period where things get extended out longer then one can believe.  I'll be watching early on today to see if this pulls back and appears to be the real move or just some dip before one more move up late in the day.  Personally I think we don't roll until the afternoon session.  So don't fall for this upside breakout as being some new rally, it's very likely the end of one.  While no one can guarantee some directional change will happen on this date or that date the charts are telling us that a turn back down is near.  But give this some time to roll as I don't see it happening early in the day.

Author: Red

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