At the moment, just after 8:00AM ET, the ES is sitting on the 13EMA on the 4 hour chart, and the 13EMA is starting to roll over. This corresponds closely with the SPY
in the 60min time frame so unless something happens between now and the cash open, then this is how the SPY
will open on their respective 60min charts. Because, per my own personal criteria, the ES, etc, is above both EMA's then the market situation remains bullish
, however, the longer we stay within this sideways channel the greater the risk becomes that we're going to roll over and out the bottom of the channel. We will need an approximately 2.5pt rally in the $SPX
to break out of the channel topside. Don't know if we're going to get that today as the futures
are dropping and making new lows as I write with the Russel leading the charge south. But it's early and anything can happen between now and the cash close, which is all that matters.
The 5EMA on the $VIX dropped below 13 on Monday. I use the 5EMA as opposed to the RSI
on the daily chart
because the RSI
just never seems to want to drop below 30. In the recent past, when the 5EMA on the $VIX has pushed below 13 and then gets down to about 12.5, we have seen corrective market reactions. Unless the markets don't rally back from the selling that's happening now in the futures
, then we may be seeing the start of another corrective move.
Of further concern is the QQQ's. The Q's have been the market leader going back quite some time but while the $SPX
and the $INDU took back all of last Thursday's losses, the Q's have not. I still believe the Q's are the market leader and if they don't recover soon and rally then they have the power to drag the markets down with them. So for this rally in the broader markets to continue, then the Q's must lead the way, IMHO, of course.