I'll be watching this 5 min (market hours only) chart of the
TF going forward. So far, today's (Wednesday's) "compression"
tactics (price action within the blue boxes) have held price up, mostly within
the upper one-half of this 3-day channel.
To put things into
perspective, here's a shot showing last Friday's double-dip and rally, followed
by Monday's gap up:
N.B. I'll post an updated chart with
further comments after the close today.
Post Market
Update: Here's a shot of how the TF closed today:
As you can see, any
attempt for a rally to hold within the upper one-quarter of this channel has
been met with selling, which has forced price down below the mid-channel
level…signs of short-term day-only buying or short-covering. Today, as price
nears the 800.00 level, the subsequent selling from this level has been
shallower…possibly signs that this E-mini Futures Index is in accumulation
mode, and poised to go higher.
Looking at a bigger picture, you can see
on the 60 min (market hours only) chart below that price is,
once again attempting to break free of a downtrend that began in mid-September.
The 800.00 level is roughly in line with a 40% Fibonacci retracement from the
September high to last Friday's low. Monday's gap remains unfilled, and, whether
this is a breakaway gap and the beginning of a trend reversal remains to be
seen. I'd like to see price reclaim and hold above the 800.00 level and begin to
make higher highs and higher lows on this timeframe before I'd make such a call.
Otherwise, a failure around this level would likely send price down to,
potentially, fill the gap and on to a lower low.
As a confirmation of
any further (sustainable) rally, I'd also like to see price get (and stay) above
46.00, then 47.50, and, finally, 50.00 on this Daily ratio
chart of the Russell 2000 Index compared with its Volatility Index. The
Momentum indicator is flowing up and is still above zero. As long as it holds
above that level, I'd look to see how price is behaving at/above 800.00 on the
TF.
The Russell 2000
Index is still the leader ahead of the Nasdaq 100, S&P 500, and Dow 30
Indices after today's action in terms of percentage gained from last Friday, as
shown on the 4-day comparison chart below. In
fact, it pulled ahead at a greater pace today…one to watch to see if buying
favours the riskier Small-Cap sector over Technology and Large-Cap/Blue-Chip
stocks. Alternatively, I'd watch to see if this Index begins to weaken,
particularly around the 800.00 level on the TF and on rising volatility, which
could lead the other Indices down to fill their respective recent gaps, and
lower.
***I'd like to take
this opportunity to wish my American neighbours a Happy
Thanksgiving…I hope no one goes hungry…please share with someone
less fortunate. 🙂
