Trends Weakening Again; Volume signal end of Bear Market Rally
So we are here again where the trend appears to be weakening. We are currently below the 30m lower high downtrend line, which I drew in this time.
We haven't really been able to approach the 1-Hour Uptrend Higher High Line.
I also drew in the 2-Hour Higher High Uptrend Line, which we have been failing to go below during several visits over the last week.
All that being said, any movement towards that 2-Hour Line would provide a potential entry of a rally up, if you are looking for an entry point on the lower side. That is of course, if we can get down to 4130's without signaling a 2-Hour Downtrend, although it would be a higher low downtrend at this point.
Any movement back above the 30m Uptrend should be signaling the rally will continue.
That being said... I had written a few days ago about how a Bear Market Rally tends to look when it comes to an end. With most sellers basically sitting out, a bear market rally is buyers just buying and selling amongst themselves and driving the price up. In terms of the rally fizzling out, a whipsaw day with no volume shows those buyers are losing interest and funds to pump into the market to continue the rally. We had that yesterday. Volume yesterday was nearly nonexistent in terms of normal ES Futures trading. It doesn't mean the rally HAS to be over, the Market can do whatever it wants, however it is a cautionary sign that bulls have exhausted themselves and we are potentially in store for a pullback.
We are also close to being overbought on the RSI, and the Nasdaq, which is the Tech heavy index, has been touching the overbought level already. So algo traders are going to lose interest in any buying and be brought in as sellers if they were sitting on the sidelines.
Also, not to forget, our Daily and 12-Hour are technically still showing a lower high uptrend, and are therefore downtrend signals still.
Overall, in terms of just chart analysis, it is soon time to test what the low of this rally will be. Higher highs don't make a bull market rally, it is all in focusing on where the low is. At this point, this could easily just be a lower high to the last rally we saw before we found new lows.
In terms of economic data;
Job Numbers are coming in, and people keep focusing on that for any signs we are heading into a recession. which is, at least in my opinion, fairly naive. In every recession we've had, by the time jobs fell, we were WELL within a recession. Job numbers are an immensely lagging indicator for gauging recessions.
So again, most trends are still showing an Uptrend, but look to be weakening. The much longer trends are still in a downtrend. Volume is warning the rally could be coming to an end. Jobs aren't likely to give us much information, but they are being talked about a lot.
We haven't really been able to approach the 1-Hour Uptrend Higher High Line.
I also drew in the 2-Hour Higher High Uptrend Line, which we have been failing to go below during several visits over the last week.
All that being said, any movement towards that 2-Hour Line would provide a potential entry of a rally up, if you are looking for an entry point on the lower side. That is of course, if we can get down to 4130's without signaling a 2-Hour Downtrend, although it would be a higher low downtrend at this point.
Any movement back above the 30m Uptrend should be signaling the rally will continue.
That being said... I had written a few days ago about how a Bear Market Rally tends to look when it comes to an end. With most sellers basically sitting out, a bear market rally is buyers just buying and selling amongst themselves and driving the price up. In terms of the rally fizzling out, a whipsaw day with no volume shows those buyers are losing interest and funds to pump into the market to continue the rally. We had that yesterday. Volume yesterday was nearly nonexistent in terms of normal ES Futures trading. It doesn't mean the rally HAS to be over, the Market can do whatever it wants, however it is a cautionary sign that bulls have exhausted themselves and we are potentially in store for a pullback.
We are also close to being overbought on the RSI, and the Nasdaq, which is the Tech heavy index, has been touching the overbought level already. So algo traders are going to lose interest in any buying and be brought in as sellers if they were sitting on the sidelines.
Also, not to forget, our Daily and 12-Hour are technically still showing a lower high uptrend, and are therefore downtrend signals still.
Overall, in terms of just chart analysis, it is soon time to test what the low of this rally will be. Higher highs don't make a bull market rally, it is all in focusing on where the low is. At this point, this could easily just be a lower high to the last rally we saw before we found new lows.
In terms of economic data;
Job Numbers are coming in, and people keep focusing on that for any signs we are heading into a recession. which is, at least in my opinion, fairly naive. In every recession we've had, by the time jobs fell, we were WELL within a recession. Job numbers are an immensely lagging indicator for gauging recessions.
So again, most trends are still showing an Uptrend, but look to be weakening. The much longer trends are still in a downtrend. Volume is warning the rally could be coming to an end. Jobs aren't likely to give us much information, but they are being talked about a lot.
Comment:
This push down is signaling a downtrend in the 1h, 2h, and 3... see if it holds before I update my analysis. I see people trying to jump out of their long options as it is an options day as soon as possible also, and causing an avalanche in price.
Comment:
1H and 2H both settle with downtrend marks at 4108. The push down put the 1H at basically a neutral downtrend to downtrend line.
The 2H is a higher low downtrend mark, which will likely try to pull things back up, just not sure that it will hold. 3H doesn't settle until 10am EST.
This destroys the debate of a full recession, at least for the moment. Which again, is a stupid baseline to use because skyrocketing unemployment doesn't show until we are MONTHs into a recession, but whatever... lol...
At least we finally might regain some reality.
The 2H is a higher low downtrend mark, which will likely try to pull things back up, just not sure that it will hold. 3H doesn't settle until 10am EST.
This destroys the debate of a full recession, at least for the moment. Which again, is a stupid baseline to use because skyrocketing unemployment doesn't show until we are MONTHs into a recession, but whatever... lol...
At least we finally might regain some reality.
Comment:
Oh, and by the way... As I've been saying that we are going to see Energy drop with this next overall drop and send us lower... Energy fell -3.5% yesterday.
Comment:
Time to see if optimist come swooping in and try to trade these prices back up. Wouldn't be the first time, but with us already higher in price and indicators, I just don't know that it happens here.
Comment:
If this short term push back up gets things back above 4136, it would pull it back above the 3h uptrend higher high line.
If you aren't already in a short for the day, I'd look to see a move back to at least zero if we get above that, and then be waiting below 4108 for continuation of the bearish move if that continues.
If you aren't already in a short for the day, I'd look to see a move back to at least zero if we get above that, and then be waiting below 4108 for continuation of the bearish move if that continues.
Comment:
On a more micro level, the 5m and 15m are in lower high uptrends. Is this an entry point for those late to the downside, or the push that all news is good news rally we are running on.
I was surprised to see a moderate volume open after that initial push down. It could be that too many sellers got burnt in this rally and aren't ready to enter the market yet. I know over on DailyFX they mentioned that 62% of their clients are already short, so buyers are running out, but seem to be making some final push here to keep things going.
I was surprised to see a moderate volume open after that initial push down. It could be that too many sellers got burnt in this rally and aren't ready to enter the market yet. I know over on DailyFX they mentioned that 62% of their clients are already short, so buyers are running out, but seem to be making some final push here to keep things going.
Comment:
So, we've been through this before, even though it didn't sustain... but this big push down, small rally, is beginning to provide lower high uptrends. This could go on for the rest of today, and potentially tomorrow, but it is most certainly the beginning signs of a likely trend reversal, which will allow us to FINALLY correct this overbought trend phase we have been in on the 12-Hour.
This COULD be the beginning of the turn around of the market, but we NEED to see higher lows before the market should commit to an upside.
This COULD be the beginning of the turn around of the market, but we NEED to see higher lows before the market should commit to an upside.
This SHOULD cause the market to go down because the Fed will have to tighten more to cool inflation down... but...
Lately with sellers sitting out, Bulls have been trading as Bad News is Good News and Good News is Good News.