Weekend Recap: A Look at the US Indices, Yields, and the $VIX

I wish I had a novel insight to provide for you this weekend, but I haven’t much to add. My basic thought on $ES remains intact: I don’t believe this move is finished, and it is a bit of an open question as to just how high it might go and how long it might take from here before a retracement. It might drift in an upward trajectory for a while (noted here) but a case can also be made for it go significantly higher, too (noted here).

And though I have some confidence that $ES hasn’t finished rallying, I have less clarity regarding the other indices. In this last post on the indices, I gave upward targets, and they have all been met, or exceeded, so I don’t have much to say for the moment that is decisive. But regardless, I’ll walk through them each in turn here just to have some assessment of them together all in one place again.

1. My primary assumption for $ES for the moment is that it will tend up and to the right, finishing a series of fours and fives to complete a first aggregate impulse wave. I will do my best to try to identify those fours and fives if they do, in fact, materialize. Of interesting note is that if we do get the arc, it may also give us the appearance of a double top as it crests, so we can anticipate, even now, how the bear argument may not immediately fade from view.

ES

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My Bias on $ES Remains Bullish Here

A little bit of stream of consciousness for you today. My basic analysis from yesterday remains unchanged. I think it’s more probable that we go up rather than down, but there of course is at least one structural risk that remains intact. We of course could look back on that little structure in a week and say, “Ah, I see that must not have been a triangle—of course the market wouldn’t repeat itself exactly like that”).

But, let’s look over some things:

$ES is in a small bull pennant here, perhaps consolidating the energy it needs to break the downtrend line. It may even go as low as the orange line (for “equal legs”) or as low as the orange box (typical depth of a “2” here and prior trend line retest). Both of these are marked by the green arrows. Lower than those and I would begin to become concerned.

ES

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$ES Bull/Bear Alternate Counts Updated

As suspected this morning, the developing triangle on $ES has proved to be a relevant structure, as it’s just where we stopped at the lows, and just where we came to at the close.

If you’re bullish, you want to see us push through this and overtake prior highs (I personally think it will).

ES

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A Quick Note on the $VIX

The $VIX has broken out of the big bad wedge (blue) again. That should be sort of crashy for the markets, however: we’ve now poked out once, and broken out twice. There is a possibility that the more we mash through that structure, the more the market is signaling that it is done with that structure and is moving on to a new one (see the next chart below).

VIX

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