ES daily 03/08: bears still in control
I mentioned two possible paths in yesterday's daily idea, and market picked the route that went lower first and rallied 137 points from overnight low to noon high. I had my route yesterday as 4110->4250, market bottomed at 4138, then topped at 4275, about 25~30 points higher above my expectation, I think that's pretty close. There are a few things that catch my attentions in today's move:
1) 138 points bounce is not enough to confirm the bottom, this fits my expectation of 150~200 points rally needed, and as we continue lower, this range could become larger, as shown in March 2020 drop.
2) I was totally correct that the announcement of US oil embargo against Russia would be a buy the news event, as it rallied 120+ points after it's announced today. However, a simple news that "PUTIN DECIDES TO BAN THE EXPORT OF PRODUCTS AND RAW MATERIALS OUT OF THE RUSSIAN FEDERATION UNTIL DECEMBER 31ST" started the afternoon drop, and removed all the gain after the embargo announcement. This once again proved how sensitive the mood of market participants are, which is typical bearish trend behavior. I assume it will continue work like this next few days, until market finds the real bottom.
Since the rally today is already an abc type of bounce, we may already have the wave (iv) of (5) done. But we only had a higher low this afternoon, compared to overnight low, thus qualified as b of (iv), so it's also possible that market will rally again from here toward 4260~4300 range for (c) of (iv) tonight/tomorrow. No matter what, with CPI report Thursday and Fed meeting next Wed, my expectation remains the same as yesterday: we will go down next few days till at least this Friday/next Monday, and minimum target would be a retest of 4100 low, with ideal target of 3950~4000. Please remember when market is in bear trend, it will never go straight down, instead there will be huge back and forth swing, and we should always take profit of puts/buy hedge call at the support range and short the resistance range, until market signals that a bottom is found.
1) 138 points bounce is not enough to confirm the bottom, this fits my expectation of 150~200 points rally needed, and as we continue lower, this range could become larger, as shown in March 2020 drop.
2) I was totally correct that the announcement of US oil embargo against Russia would be a buy the news event, as it rallied 120+ points after it's announced today. However, a simple news that "PUTIN DECIDES TO BAN THE EXPORT OF PRODUCTS AND RAW MATERIALS OUT OF THE RUSSIAN FEDERATION UNTIL DECEMBER 31ST" started the afternoon drop, and removed all the gain after the embargo announcement. This once again proved how sensitive the mood of market participants are, which is typical bearish trend behavior. I assume it will continue work like this next few days, until market finds the real bottom.
Since the rally today is already an abc type of bounce, we may already have the wave (iv) of (5) done. But we only had a higher low this afternoon, compared to overnight low, thus qualified as b of (iv), so it's also possible that market will rally again from here toward 4260~4300 range for (c) of (iv) tonight/tomorrow. No matter what, with CPI report Thursday and Fed meeting next Wed, my expectation remains the same as yesterday: we will go down next few days till at least this Friday/next Monday, and minimum target would be a retest of 4100 low, with ideal target of 3950~4000. Please remember when market is in bear trend, it will never go straight down, instead there will be huge back and forth swing, and we should always take profit of puts/buy hedge call at the support range and short the resistance range, until market signals that a bottom is found.
Note
ES find support and printed higher low last night, bounced 76.4% of the yesterday afternoon drop. Two paths are likely now:1) market drop right from this range of 4235~4250 to 4100~4110
2) market continue higher to complete 5 wave up to 4275~4315 range
My delta is already positive, I am adding Friday puts to lower it, will add more put if we are getting close to 4275
Note
If we can clear 4325 today, that would be the first sign that bottom is in, but then we have to sustain the potential damage of tomorrow's CPI report to confirm.Note
my expectation today would be a retest of yesterday low range, probably around 4160~4170, then going higher into close to print a green day.
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Clause de non-responsabilité
Les informations et les publications ne sont pas destinées à être, et ne constituent pas, des conseils ou des recommandations en matière de finance, d'investissement, de trading ou d'autres types de conseils fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.