Tuesday, June 25, 2024

ES Morning Update September 21st 2016


The futures went back up to retest that 2145 horizontal trendline of resistance last night and this morning it seems.  But they failed to get over it and have since pulled back some.  It looks like a "W" to me, which usually makes a "WV" pattern (which is bullish), and that's the opposite of an "MA" pattern (which bearish).  The left side of the "V" appears to be forming now on this pullback.  If it finds support at the new rising trendline I just drew this morning, and doesn't take the 2130's double bottoms (which make the bottom points of the "W") then the next move up should be to make the right side of the "V", and this pattern suggests a move up equal to the move down to make the "WV" pattern.

Basically from the 2145 high on Monday to the 2130 area lows we have about 15 points, which would be added to 2145 to get about 2160 as the projected move on this pattern.  However, if the 2130 area lows are taken out on some wild swing low (possibly from something the Fed's say or don't say?) then the pattern is invalid.

As far as the technical analysis part there's no clues there as again the MACD's aren't showing anything that could forecast the next directional move.  From a wave count (Elliottwave) there's no clear count that I can see.  So patterns, past history and gut is about all you can work with today.  The past history part tells us that most Fed day's close green and usually near the high of the day.  This is more accurate when the market is going down into a meeting, but it's been mixed into this meeting... not really up, nor down, just choppy.

The polls out there are saying there's a low chance that the Fed's will raise interest rates, but that really doesn't mean anything.  We all know they are trying to hold the market up until the election because they want Hillary to win and that's the only reason it hasn't fell off a cliff already.  But it is what is and we have to play the hand dealt to us.

So let's keep it simple and look for that rising trendline of support to hold today and watch the WV pattern play out with a rally into the close to around the 2160 area (notice that's just a hair over the 2155 prior high?... SkyNet taking out those stops!).  If the pattern fails then there's just no play that I can see until things settle down either Thursday or Friday as today's close will be important to see first.

A panic move down that takes out the recent 2130 area lows could go low enough to turn the market back up Thurs/Fri for another attempt at making a new all time high.  I don't feel like that will be the case here but it's possible.  Naturally this assumes no interest rate hike or and surprise comments, as either of those could cause nasty drop for several weeks.  Right now I'm just watching closely to see if they can take out some overhead stops on a rally into the close to end this bounce from the 9/9 low.

Author: Red

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