My Bias on $ES Remains Bullish Here

A little bit of stream of consciousness for you today. My basic analysis from yesterday remains unchanged. I think it’s more probable that we go up rather than down, but there of course is at least one structural risk that remains intact. We of course could look back on that little structure in a week and say, “Ah, I see that must not have been a triangle—of course the market wouldn’t repeat itself exactly like that”).

But, let’s look over some things:

$ES is in a small bull pennant here, perhaps consolidating the energy it needs to break the downtrend line. It may even go as low as the orange line (for “equal legs”) or as low as the orange box (typical depth of a “2” here and prior trend line retest). Both of these are marked by the green arrows. Lower than those and I would begin to become concerned.

ES

The $VIX has failed to break out of the Great Sven Wedge™ again. Having done that more than once now begins to invalidate the structure altogether. I discussed that a bit back here. (Also, the $VVIX is under 110, generally a bullish signal.)

VIX

$SPY, on the other hand, has broken out of its downtrend line and is retesting it as I type this up, a positive development.

SPY

The CBOE Equity Put-to-Call ratio has been grinding up nicely the entire time the market has been grinding down. it looks like everyone is hedged up quite well here. This should make it difficult for the markets to decline precipitously. These puts should apply upward pressure on the market (and ignore the bullish/bearish markers; I use those as levels for a long-term moving average analysis that isn’t relevant on this time frame).

PCCE

And finally, the shitty jobs number is also often a boon, I guess. Whatever. Accommodative Fed and whatnot.


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