Saturday, July 13, 2024

ES Morning Update November 3rd 2016


The futures are up slightly this morning as it keeps riding the green falling trendline down and bouncing off of it.  The move up also has broken out of the falling wedge on the futures, which generally means another drop is coming to backtest the breakout, which would be at a lower level if it happens.  It also "usually" happens early in the day, like right after the open... and then it turns back up and rallies the rest of the day.  If for some reason it rallies early instead it will open the doors for a late day sell off that has higher odds of going much lower then it would in the morning.  Remember, as time passes by the falling trendlines go deeper.

What I see on the technical side is a 60 minute chart that will be overbought by midday or so, but the 3 and 6 hour charts are pointing up nicely.  They could provide the strength to keep the early backtest from happening.  The bulls would rather dip this early to have better strength on a rally.  The bears would like to see a straight shot up to the FP on the SPY where the bulls will be exhausted with overbought charts everywhere allowing for another big drop to lower lows to happen shortly there after.

My thoughts?  I'm a little mixed on how this is going to play out but if I just think about how it should be done based on the coming news events I'd go up early and down late today to make a slightly lower low and red close.  Then I'd use the Non-Farm Payroll report (now called "Employment Situation") to create the strong rally.  Then I'd continue it all day Friday and into the election where the FP could be hit to top out the bounce and allow another move down after the election.  The charts can support this scenario as well as I think they can provide enough support to push the futures up early in the day and not allow it to rollover until later near the close.

I could see a push toward that falling trendline pointing to 2115 today, but I'm not sure if it will get that high or not?  I guess it will based more on how much time has went by as the longer it takes the more the charts get extended and possibly overbought.  However, that's probably too high for today as there's a lot of trapped bulls just overhead in the 2102-2107 area, so I wouldn't expect a lot today.  It's still mixed chartwise.  Odds are good for one more shakeout move down at some point today.  Whether that is early in the day or late in the day I'm not sure.  I'd do it going into the close but I'm not SkyNet so it might have other plans.  However, if we close red today I think we'll see a nice up day on Friday from the NFP report.

Author: Red

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