Saturday, July 13, 2024

ES Morning Update July 10th 2017

Futures pushed through the falling trendline of resistance over the weekend and pre-market it seems.  Now we appear to be in a consolidation mode while we pullback a little to back-test the trendline.  But the 6 hour chart (not shown) has come up from oversold to around the zero level on its' MACD's and is rolling over this morning.  This suggests to me that while I'd normally expect this 60 minute MACD to drop to about the zero level and turn back up it could drop lower as pressure from other bigger time frames pushes down on it.  Meaning we could drop back into the triangle and possibly retest the 2410 area again.

The SPX Cash Index (not shown) is getting oversold on it's bigger picture 60 minute chart as it too swings up and down in a triangle.  The daily chart on it is down to the +3 to +5 levels for it's MACD's and appearing like it wants to turn back up.  It's also below its' 12 and 26 day EMA's, with Full Stochastic's down in the 35 area.  All this suggests to me that we'll see lower prices ahead but are close to a turn back up to make the negative divergence that we don't currently have on the daily or 60 minute charts... nor the 6 hour on the futures.  The horizontal support area for the SPX cash that makes the lower part of the triangle is the prior 2407 low.

My thoughts are this... we will make another move down to retest the 2410 area on the futures before any stronger move up happens.  Will that happen today?  Don't know?  We could hold the falling trendline today and hook back up on the 60 minute MACD later today to keep the trendline from breaking but that would just let the 6 hour MACD make a turn back down tomorrow.  Monday's are sometimes boring as traders come back to work so if we chop around and don't break that 2417-2420 falling trendline then the bulls could push it out another day I guess.  But I don't see much upside strength if they first don't go down to retest the 2410 area to build a stronger level to rally from.  I think there's a gap down around there too on the SPX and DOW 21300 area.

We all know now how manipulated the market is and to do the most damage to both bulls and bears a chop zone would hurt the most I think.  Meaning it would not surprise me to see the bulls refuse to go retest the 2410 area and instead hold the falling trendline today and try to attempt another rally up tomorrow... which will not be that strong in my opinion and will have low odds of breaking through to a new all time high.  But if they play fair with the bears they could have a good shot of a new high after a dip to fill the gap below.  Overall I'd just wait for that 2410 area to be tested where I'd be interested in a long (assuming the charts don't change to a bearish alignment, and they shouldn't).  It's chop this week in a range again or a retest lower and nice rally attempt is what I see.  Give me a new all time high in the next week or so to setup negative divergences everywhere and I'm a bear again.  But currently I'm just watching and will be a short term bull around 2410.

Author: Red

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