Just when you think the tape has gone into a persistent vegetative state it can sometimes surprise you, and ES did that yesterday with an unexpected trend down day. This is good news from a technical perspective as there is usually a spike down shortly before a significant high, and I was thinking that ES most likely didn’t have the juice to manage that this week. We call this the low before the high, and, if this is that move, then we are looking for a low shortly into a retest of the all time high and likely marginal new high. If that marginal new high can be managed this week then the first day of 2017 may be the start of a significant decline.
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Low Volume Yawnfest?
The tape has been impressively dull, particularly in the afternoons, but everything is still on track, just moving really slowly.
ES has established good support at the weekly pivot at 2260 and the next obvious move is a retest of the high. If that doesn’t happen in the first 90 minutes today though then locating a buyer and a seller to keep the tape moving might be a problem, judging from yesterday’s action at least. The ATH is only six handles away at the time of writing, but on the tape we saw yesterday I’d describe that as deceptively close. ES Mar 60min chart:
Looking for Survivors
I hope everyone had as relaxing a weekend as I did. I had a very relaxing holiday weekend, though we’ve now reached the usual point of starting to clear up and looking dubiously at the mountains of leftovers.
Twas (The Day Before) The Day Before Christmas and ….
My expectations for the tape today aren’t high. Volume will be low and we may not see much of interest on any markets before next week. Indices might avoid the vague upward drift we see on days like this so often, but it’s unlikely there will be much in the way of nice intraday setups, and if you’ve been waiting for a low interest day to catch up on other work you’re a bit behind on, paperwork, or even just spend some quality hours watching paint dry, then this might be a good day to do that.
Still, here we are, and I did a premarket video today that I posted on my twitter at the open. If you missed that then you can see that here. If the tape doesn’t do the holiday drift up or just stop moving altogether, I’m leaning modestly bearish as long TF stays under the weekly pivot at 1370.50.
Ho Ho Ho Hum
The tape is low volume and has been pretty dull this week on indexes, particularly on NDX/NQ. Volume is unlikely to increase much before next week and the tape may well remain boring, though at the time of writing ES and TF are making a spirited attempt at converted the weekly pivots there to resistance, and if that attempt is successful then this might get more interesting, though it might just establish a tape just as boring with a different underlying bias.
Until we see ES and TF convert their weekly pivots to resistance my overall lean is towards seeing retests of the all time highs. Even in that case I’d note that the downside targets on ES and TF to establish ideal bull flag channels (to then retest the all time highs) would currently be in the 2238 and 1345 areas respectively. On weekly pivot conversions today then those (moving) targets would be the obvious next targets. If the indices head there then that move might be just as dull. I tweeted my premarket video today looking at the setups on ES, NQ, TF, DX, CL, NG, GC & ZB. As usual the indices were among the least interesting looking instruments to trade today. You can see that video here.
