The Die Is Cast

Wednesday’s breach below ES 2800 was the inflection point that effectively put us on the path toward 2700 and potentially lower. Quite frankly no big surprise there as the price action over the past few weeks was not indicative of a medium term trend reversal. The direction as of now remains down and unless you are positioned short there are few reasons for optimism.

At this point I am looking at two preliminary target ranges: The first is near ES 2700 which is psychologically important and currently coincides with the 100-week SMA. Unfortunately the latter is mostly academic in that it has only been fleetingly tested in the past two years, which of course is the long term curse of a low volatility bull market.

Of course if you draw a line below the recent series of spike lows on the weekly panel then it also happens to terminate around the ES 2700 mark. However given the change in volatility over the past year an overshoot into 2650 would not be uncharacteristic.

The volume panel seems to agree as we see quite a bit of historical activity around that range. So should we drop that low then I would definitely be on the lookout for a convincing floor pattern. As usual the Zero indicator will be your friend during turbulent times.

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Update on crude: I almost got stopped out but had wisely put my ISL < the big 60 mark. Although I’m not yet scraping 1R I am shifting my stop to break/even ahead of the weekend.

Helping A Friend Of A Friend In Need

Before we call it a week – here’s a chance to mark off your ‘good deed of the week’ in case you haven’t done it yet. Duc – a good friend of my quant buddy Tony (who has posted here on several occasions) was recently diagnosed with thyroid cancer.

So Tony snapped into action and created a gofundme campaign to get Duc the best treatment possible. Now it would mean a lot to both of us if you could drop by and put a penny in the box. It doesn’t have to be much and even a small contribution is appreciated. Thanks a lot in advance 🙂