ES is so far conducting a garden-variety correction within a clearly defined upward trending regression channel (the third so far this year and the sixth since the March 2020 lows: June 2020, September 2020, Late October 2020, January 2021, and March 2021 are the others). The bottom of the channel is around 4000 to 4020. For those of you who bought the dip today, good luck: that space at the bottom suggests that the selling is not done yet.
There are a few things to watch to see if a near term bottom is near:
1. Is VIX trending downwards even as new lows are achieved? This has happened in 5/6 of the post COVID crash corrections. 2. Is the VIX-VVIX correlation indicator flashing red? If so, stay away! Other times this has occurred during a pause in a selloff (October 2020 and mid September 2020), it meant more selling was on the way. 3. Is the OBV oscillator continuing to show bullish divergence as it is now? 4. Is VVIX trending downwards?
Criteria for a long:
1. T 2. F 3. T 4. T
Obviously, I expect us to break this channel during May or June, at which time things will get truly ugly, and the September 2020 high zone may be revisited (3550) in May or June. But we can expect some nice bounces along the way - one of them likely being at 4000.
Order cancelled
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well that didn't happen. LOL (it almost did in the overnight).
It actually nearly made it to my buy range overnight when I was sleeping. Sometimes the best trades are the ones you DON'T make. We just now wicked off the fib line shown at 4122 (just before the green line). I'm thinking 4150 by tomorrow (solid green trend line), if we don't drop here which I suppose is possible but unlikely, but this particular trade didn't happen.
Buying here might be good, but I haven't done it and haven't looked into it. I'm working on setting up a bot with Ninja Trader to execute these kinds of trades in the ON.