Not a Primary Count: $ES Back Burner Bear Thought

Fading people is not a trading strategy, but: today’s pump has caused virtually everyone to adopt the 1-2 count. No idea if everyone’s actually positioned for it or not, but if we all get on the same page, the page will change. So, I’m going to present a bearish $ES alt, not because I think it’s probable at this time, but only because if I see anything I don’t like, I may revert to it and if I do, I don’t want any of you to wonder “Where in the hell did that come from?

A few notes:

  1. We’re still sort of in a strange broadening formation (first pointed out here).
  2. The Fed’s actions are actually bearish, one would think. Was this all short covering?
  3. Volume was terrific today, breadth was only ok. 2:1 advancers vs. decliners on a pump like that is not so good. 3 or 4:1 would have been great.
  4. Bitcoin is still on its knees.
  5. Oil is still under its 13-year trend line.
  6. Also, the weirdest one: the initial move after the FOMC release was down, and that often forecasts the eventual move. And when that works, it’s usually the size of the fake move, but then in the other direction.

I’m not entirely sure ahead of time what would cause me to want to revert to this, but perhaps if we don’t get a nice (red) 4th and then 5th wave on my primary count. If this move from the 12/14 low turns out to only look like 3 waves instead of 5, I suppose that would ring an alarm bell for me.

ES


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