≈ Jump in or Hold the Line? ≈
We are sitting in some interesting territory in the markets right now? There are lots of bearish undertones but wait aren’t we making a higher low pivot? The answer is yes and yes! If we take a look at the chart of the S&P 500 futures, we see a smorgasbord of technical conditions happening all at once. To start off we have a down channeling intermediate trend. This is evident by the lower highs in both September and October. To coincide with this, we also have lower low pivots in the same two months as well. This is the best way to visualize a trend. To add to this, we had bearish moving average crossovers twice in the month of September. If this was all we looked at then it would be easy to jump on the bear bandwagon, however, as we stated above, we have made a higher low pivot in the last three sessions and thus we have a short-term uptrend.
The first thing that is required for a reversal is a change in the shortest time frame trend and we are seeing that right now. Here is the crux, there are no guarantees that the short-term trend continues in the same direction. Therefore, we need other technicals in place before we can be assured of the actual reversal. We need a break of the falling trendline before we can feel good about actual change in trend. There are also the moving averages overhead to contend with and any overhead resistance as well.
When looking at all the information before us it is easy to see that from a technical standpoint we are “stuck in the mud” at this point from a market perspective and “holding the line” is most likely the best plan of attack until the markets give the go ahead to get more involved.
Chart of the Day
/ES Chart with RSI
This chart of the /ES shows both the intermediate bearish trend and the short-term bullish trend. This kind of technical picture causes pause and concern and requires monk-like patience to ensure that trouble doesn’t find our bankrolls.
Video of the day
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