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Assessments / Blog


2018-12-19
ES #F Supply overcame demand late in session


The ES closed down 23.75-points Yesterday, at 2532.00 (March 2019 contract), made a low of 2530.00 after an initial increase to a high of 2577.75 and again came close to the year’s low at 2529.00.

It is make or break time for the markets with Today’s FOMC meeting and its decision on interest rates (see link to article below). If this year’s low does not hold and there is follow through to the down side, we may see the start of a sell-off into the low 2400.00 level. On the other hand, no follow through to the down side and a favourable Fed decision, could spark a significant rally, for a rebound to the 2686.50 level. We mentioned the possibility of “Bag holding” Yesterday. Yesterday’s down bar, low range and very high volume, making a lower low, fits into this possibility.

We are still in Selling pressure territory, but Selling pressure eased, with a Divergence to the up side.  Supply / Demand Sentiment is nearly neutral (near zero), confirming that the market is at a balance point, seeking direction from here.

The comparative strength/weakness analysis, is still at extreme weak levels, but weakness did not deteriorate.

Bag Holding:

Narrow down bar with very high volume. Bar must close down into fresh new ground. So far the current bar is an inside bar and has not moved into fresh new ground (lower than previous bar). Bag holding does not occur very often. The professionals suddenly mark the price down to collect stops and to panic the “herd” to convince them to sell at low prices, “holding out an open bag to collect from the sellers at these low levels”.

Daily Signals December the 18th:

S & D Dashboard Algorithm is Bearish but the Daily Signals turned Bullish

Caution:

Make or break time. The Fed’s interest rate decision could be a market mover.

 

Link to Facebook Group where these assessments are also posted regularly.

Click here for example of reversal trade taken in Feeder Cattle that can be found on this page.

 

ES SETS UP MAJOR DOUBLE BOTTOM AHEAD OF THE FED

If the Fed holds true to their earlier promises of continued rate increases, we could see this 2530 level broken as price retreats from any relief rally and attempts to find lower support.  If the Fed changes the context of their message and adopts a slower and more insightful rate policy, the markets are poised for one heck of a potential rally.

Click on chart or this link to read more....

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