Here is my weekend look a the ES/SPY going into Nov8-12. ES like the NAS continued the uptrend last week without pause. Price as has felt extended for weeks now and I had expected at least a pause after the FOMC meeting but the event became another catalyst for the market. It was a successful taper as they are calling it and the market had additional catalysts toward the end of the week with the infrastructure bill likely to pass and a slue of positive earnings.
Technically the ES has cleared the bearish harmonic completion zone (see Oct 25 post) so that area now becomes support. When a harmonic completion zone is breached I expect a continuation of the dominate trend. Long traders did not take profits and those trying for a reversal were run over and either stopped out or flipped their positions. Price is now at the ascending trend line and has 1.618 fib resistance above. As price makes ATH we run out of reference points to measure for targets. So we must stick with the trend until it changes. For now the trend is up.
If price pulls back look to the green box for first support and the the top of the neutral zone for secondary support. My bias stays bullish as long as price stays above the neutral.
I will update this chart through out the week if the scenario changes.
Bear notes:
Potential reversal of the dropping 10 year yield
Sell the news reaction to the infrastructure bill
Market needs a new catalyst as earning wind down
Elon Musk tweet
Bull notes:
10 year yield dropping
Small caps breakout
Strong earnings growth.
November seasonally strong
Infrastructure bill passed.
No rate hike and slow taper.
Things to watch:
Many highly watched growth stock have earnings this week (PLTR, NIO, TTD, SPCE, AMD, PLUG, PYPL ect.
Tuesday... a lot of Fed head speaking
Wed... Jobless claims & CPI
Fri... JOLTS and University of Mich. Sentiment
Technically the ES has cleared the bearish harmonic completion zone (see Oct 25 post) so that area now becomes support. When a harmonic completion zone is breached I expect a continuation of the dominate trend. Long traders did not take profits and those trying for a reversal were run over and either stopped out or flipped their positions. Price is now at the ascending trend line and has 1.618 fib resistance above. As price makes ATH we run out of reference points to measure for targets. So we must stick with the trend until it changes. For now the trend is up.
If price pulls back look to the green box for first support and the the top of the neutral zone for secondary support. My bias stays bullish as long as price stays above the neutral.
I will update this chart through out the week if the scenario changes.
Bear notes:
Potential reversal of the dropping 10 year yield
Sell the news reaction to the infrastructure bill
Market needs a new catalyst as earning wind down
Elon Musk tweet
Bull notes:
10 year yield dropping
Small caps breakout
Strong earnings growth.
November seasonally strong
Infrastructure bill passed.
No rate hike and slow taper.
Things to watch:
Many highly watched growth stock have earnings this week (PLTR, NIO, TTD, SPCE, AMD, PLUG, PYPL ect.
Tuesday... a lot of Fed head speaking
Wed... Jobless claims & CPI
Fri... JOLTS and University of Mich. Sentiment
Comment:
Broke lower but held the Nov 5 low perfectly. Similar to the NQ comment. The red box should be resistance if this is to go lower. Above the red box again is bullish. A break of todays low may take us to the lower green box. So far holding up.
Comment:
Overhead resistance held and price made a lower low. Green box below a likely target to the down side. Watch lower time frames for a reversal before buying the dip.
