I want to add two thoughts to those I brought up a moment ago.
$ES seems to be stalling at the 20-day EMA, and there is good separation between it and the 60-day EMA (red arrow). And there are a lot of “shadows” on the daily candles to our left (green arrow). So, I suppose if the jobs number beats, I can see a squirt to 60-day.
What I don’t really like about that is just sort of the sentiment here. Many bears are looking for that 4000 area to short again (the gap fill makes sense), and many bulls of course are also looking higher. Equity PCR isn’t particularly elevated, and so it’s times like these that I prefer to see a surprise, a drop from a level where fewer people seem prepared. But, the market’s going to do whatever it wants to, so there’s no guarantee about that.
And with the Russell, most of this just looks objectively bearish.
- We have this large bear flag (green structure)
- We have a second bearish consolidation (the orange structure)
- We haven’t recaptured these important prior highs with any kind of gusto
- We remain below an important channel (the purple thing)
- We remain below trend (red trend line)
It’s hard to look at any of this as a nice bullish setup.
