Assessments / Blog

ES #F Comparative weakness and Divergences

Above the daily chart of the S&P 500 mini futures contract above, showing our Comparative Relative Strength analysis and the 3-Day Chart with our proprietary Supply and Demand Dashboards, using data of the ES #F continuous futures contract.


The mini S & P traded to a high of 2868.25 Yesterday, before pulling back in the later part of the trading session to close down 0.50-points at 2861.25 (again below the 2863.75 level as mentioned previously). Demand has weakened Yesterday and the Simplified Volume Oscillator is still in Buying pressure territory, but has weakened and clearly shows a divergence to the down side on the 3-day chart. The Volume on the current up wave in progress, is the lowest since March the 13th.

3-Day Signals August the 22nd

All signals on Supply and Demand Dashboards turned bearish! 

Our Comparative Relative Strength analysis shows the ES is again weakening compared to:

Dollar Index (DX)

Gold (GC)

Bonds (ZB)

The SPY/Bonds Comparative Strength has been weak since August the 10thand a clear divergence in price is visible between the ES and the Lumber (LB)/Gold (GC) spread and also between the ES and the SPY/XLU spread.

If price does not close above 2863.75 soon, and the mentioned weaknesses continue, we will probably see a much deeper pullback. We identified resistance to the down side at 2846.25, 2834.00, 2820.00 and 2803.00.


We would be careful taking on long positions at the moment. A solid close above 2863.75 is needed, without the mentioned weaknesses, before we will consider taking long positions.


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