An Observation on the Price Action of /ES Futures

Looking at the sharp FOMC selloff given where I think we may be in the structure, I want to point something out.

My favored view is to see more to the rally before we give up the ghost. Clearing out some puts and making this structure “bigger” would “look” better from here. IF that turns out to be true and we do that, in the main view, we may rally straight from here, but there is another alternative that will take a bit more time. And I don’t want to rush things. Once I saw how big the rally was getting, I think it’s better to give it some space, despite the hawkish reaction to the FOMC presser.

If this wants to become something “bigger,” it most certainly can and I want to be patient with it.

Ok, so let’s take a peek. Note the sharp selloff from a high at the last rally that also then went on to become “bigger”—the August rally—(red arrows):


Similar. That may mean that I’m being too hasty in trying to put Green B in place now.

And so we can also do this:


This will still sort of follow the trajectory of the “1-2” noted already (here)—i.e., we’ll rally a bit, then pullback, but in this case, the pullback will be a blue c (of Green B) instead of a blue 2. So it can be much deeper and even take out our present lows.

But, this thought is motivated by the fact that our selloff looks a lot like that June selloff at the respective red arrows, and I don’t know if the fractals are going to repeat, but they might, so let’s see what she does. I will keep this on the radar.

At this point, since we’ve gone ahead and had a decent rally, a retest of the 200-day would be healthy from here, so I’m still sort of rooting for it haha

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2 thoughts on “An Observation on the Price Action of /ES Futures”

  1. I’m definitely glad I closed out my Nov 25 SPY puts this morning (nearly a double).
    I’m with you on hoping for a touch of the 200 DMA as it seems an obvious place to press on some more 1-month puts.

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