DOW - ES Charts 21/01 - 24/01

ChartMan

Legendary member
5,580 46
No change from the rot..... Having failed to pull back from the 4 slope change, things have to be grim.... No signs yet of any turnaround so no need to even be thinking about long... Having said that, RSI is sitting on 20 so we'll likely see a bit of up side. It looks like fresh air to 8250 with minor support at 8350.
 

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ChartMan

Legendary member
5,580 46
The 1 min ES chart shows some promise for up side, but then so does the dow if you look closely at the 1 min chart. The volume pickup at the end of the session shows covering the shorts/going long. The MM's must have too much stock to get rid of , having creamed it on the way down, now they'll cream it on the way up. Indecision during the mid session is clear as the price wobbled around 895 with no clear break either way, before dropping like a stone. So a move up to test 895 tomorrow?
 

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ChartMan

Legendary member
5,580 46
RS switch and positive divergence here is supported by the volume action in the latter session. So we'll get some upside, but how much and for how long?
 

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ChartMan

Legendary member
5,580 46
So we got a bit of upside, but only after an opening drop. A weak attempt at resistance and then as you were into the bottomless pit, it seems. RSI down to 14 and some positive divergence shows a glimmer of a bottom, but I wouldn't bank on it. If we can't hold onto 8300, it's 8250. Below that who knows...
 

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ChartMan

Legendary member
5,580 46
ES Vol Chart. After hours up a bit at 880.
 

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ChartMan

Legendary member
5,580 46
So 8250 and continued Positive Divergence (PD) did the biz. The down channel is broken and that has stopped the rot. For the moment...Now we have to wait for confirmation and break above the 100MA. Maybe we will get that tomorrow...
 

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ChartMan

Legendary member
5,580 46
It's a long time since we had a decent bit of TA to analyse. Today in the chat room I was looking at calling the bottom, or rather looking for confirmation of the end of the downtrend. Volumes on ES helped, when showing large down tick volumes, the close on the candle was well up the bar, with a long tail. This was the clue and was occuring at the bottoms on the bull triangle. The bull triange formation was a classic, with 3 bottoms and a breakout on the 3rd peak, accompanied by a "dip 'n' Fly" - this is caused by the MM's "shaking the tree" to get more stock ready for a big move..... Even if you missed the bull triangle, you should have seen the pullbacks to the 100MA, twice, confirming the move up at just below 8300.The target was 8360 and there we met resistance, which quickly switched to support to close the day up a few points. Another good example of closing a short at the bottom and waiting for confirmation of a reversal by watching the 100MA and looking for TA formations. At one point, there could have been a "w" bottom- the first part of the triangle, but that was rejected, and so we waited....... You could have been forgiven for closing your long at the first touch of 8360, having forgotten what it's like to be long....In any case, there was just 20 points lost...
 

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ChartMan

Legendary member
5,580 46
ES Vol action. The break out has 3 attempts at 880, making 881 and failing.The failures don't maket it back to 875, each low making a higher low. Finally the last failure only makes it back to 880 and then off it goes. Note the breakout is on diminishing volume, culminating in a final peak vol before dropping off.
 

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ChartMan

Legendary member
5,580 46
Surprise,Surprise, We never even got a sniff of the 100MA and it was back to as you were.Within next to notime we were back in the main down channel. I'll just remind you all again.... There is a big difference between calling a bottom/ end of trend and the start of a rally. Although the positive divergence that started two days ago led to a breakout yesterday, it was NOT a signal that it was time to go long. Especially not to hold overnight. WE need to wait until the price has gone abone the 100MA before we can assume confirmation. Until that time, it's just a bottom. Trade what you see. Today we saw continuation of trading within the down channel, and bouncing off the lower support line at around 8132 and moving up to resistance at 8164.
Again we can see some positive divergence setting in and that may give us some upside on Monday.
Although there were times on the 1 min chart that a breakout looked on the cards( RSI triangle breakout) the moves were only producing 0.5 point per 1 point move on RSI. It wasn't going anywhere with such weakness. Again on the 1 min chart, there wa no significant break above the 100MA , keeping you in short all day.The close saw a small rally, just touching 100MA +20.
 

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ChartMan

Legendary member
5,580 46
It's important to observe the peak volume spikes , especially around the 00's and 05's. Is this volume really pushing the price? Is there divergence in the volume? Look at the mini rallies - the volume diminishes on the way up ( down) culminating in a new volume peak ( 'blow off' top/bottom). The closing bar on the blow off often fails to close above the previous high ( or low).Time to flip the trade. Often , the turning point is within 1 point of the 00's and 05's.
 

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