A Similar Structure Is Visible on $ES

I hate being like this, guys. I have been consistent in my views. I have examined a lot of evidence from a wide variety of angles. I have also been patient. However, we haven’t had a powerful rally yet. Today would have been a great day for one because there’s an enormous number of puts expiring today, and that can give the market a lot of lift. It hasn’t, which means that that put delta is being replaced as fast as it’s decaying.

At any rate, this is not my primary expectation, but a cautionary possibility. I would prefer to see a powerful rally emerge at any moment. But I can only say for so long. Maybe it will come right after I post this.

But, the same structure we may be able to see on Apple (here) is visible on the S&P 500, too. Whereas Apple has not fallen from its channel, the S&P is below its COVID trend line, consolidating under it. If that is some kind of triangle “B-Wave,” perhaps it is done like this:

ES

It would imply another move lower. I have noted a target where the legs are equal in length (it may go lower, but it doesn’t have to).

I would prefer to think this consolidation is a Wyckoff accumulation. And if we get a strong rally, that is how I will understand it and that is how I am primarily positioned. But, if the market needs some ungodly flush before it can become very bullish again, this is something it may need to do, and I hedged for this possibility.

With Apple poised right at its channel, I can’t really know which way we’re going to go. Sentiment says we need to go up and up and up a lot and for a long time to burn that bearishness off. But if the Apple channel fails, how can I ignore that?


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4 thoughts on “A Similar Structure Is Visible on $ES”

  1. I concur completely, I expected apple and amzn to hold, both sold on weak rallies.
    I even reapplied my puts even tho I got burned on those this week because we never got what I consider full capitulation…not enough volume to convince me…
    Thanks for the insights!

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