Short-Term Inclinations on $ES

Cash and futures don’t look well-aligned (holiday trading sessions can do that). While $SPY looks to have a leading diagonal already complete (see here), futures may only just now be completing one of its own. The rally from 6/17 looks too smooshed to be a standard impulse wave, so I am going to presently count it like this:


It can mean a permanent low is in (if it’s a “1”) but it still may also only be an “a.” In either case, if it’s complete, we may see a pullback, followed by at least a second rally. If this is an “a,” we’ll only see one more rally, if a “1,” we’ll eventually see two more.

If we do get a pullback soon but take out the 6/17 low, then I would look to the bad things next (here, here). My only plan here so far is to try to remain both long and short, and take profits and re-enter in both directions for a while, trading fairly light until I see something I really like.

Today, for a gap up of this size, breadth is very “meh.” This is mostly Tesla, and that’s not confidence-inspiring. It would be great to embark on a strong short squeeze sooner rather than later, but we might not be ready yet.

[UPDATE]: I have made a revision to the idea in this post here.

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