ES - When in doubt / Zoom OutThe ES MONTHLY Range is enormous, we see 1/5 ending @ 3588, 2/5 Ranged for less than 2 months
prior to lifting off unimpeded for 7 Months.
Month 8 did make a new high, although the 26 year probability of it holding and closing over is a low
probability event as we indicated in early August.
Many trading Paradigms have been tested and rejected within the Shorter Duration Timeframes.
From my POV, the largest indication was the Break Away Gap in the DOW (YM) off 28,200. this had
never occurred before - the anomoly at this level informed Traders, the Federal Reserve went ALL IN.
And they did - M2 began an unprecedented move higher.
The Longest Bull Market in History is within its Death Throes... the violence within Price will become
even more extreme as we advance to the larger Bear Market ahead into 2022 after completing 5/5.
It's what happens in between which should be of concern - what arrives thereafter is well beyond
mere mortals ability to effect change. It will, no doubt in my mind alter Humanity itself in ways
most all ill-prepared to conceieve.
The United States has been successful in Exporting its "Culture" for decades, this too shall pass.
Pride will give way to hubris at some point, by then it will be far too late to affect any menaingful
change until a more rational generation takes up the challenge... perhaps.
Many will simply give up.
Between now and then, a great deal can occur. Death throes are violent affairs.
The "Disclaimer" should read something like this:
Price tends to behave irrationally within the current environment. All one can do is read the
proverbial Tea Leaves - of which there are thousands...
We are now trading the "Confidence Cycle" and we see how that collapsed in August. It is more
akin to the large vessel in Harbor, slow to turn, methodical and not without challenges.
Quite frequently over the past year, when we see Price dip-in to the 50SMA we see a violent
rejection and retracement. We saw this 9 Days ago when the FED posted $12B in Coupon purchases
to defend the Hourly "Death Cross' - it did not stick, but provided the Higher FIll for Wall Street
and its friends only to move lower again.
it is when we begin moving Down in rapid Extensions, out of Measured Moves... this is when the
Indicies can become angry for a reversal.
This is ahead into October.
As noted in prior posts on several Timeframes from 15min, 4Hr, Weekly and now Monthly... we can
devise a Trade Plan based upon entry into the larger Trend (Down) with the practical and only
set of tools we have - Price/Data/Senitment.
Drawdowns will be required, but will be rewarded. We see this in Bonds, patience... patience and
furher patience. Setups requie time, money and patience.
The Federal Reserve will do what it will to manage Price in to follow suit of the Data and Sentiment.
We simply Obey, as this, again... is well out of our control. It's very Orwellian, dystopian and many
other unseemly Nouns, Adjectives and Adverbs... those are for History to pen and stroke.
The 4400 Level will be extreme in it's importance as should Price Fail within the 15min Falling Wedge,
we can see the 100SMA being challenged next - the issue is every time this has cocurred, we have seen
a reversal to defend the Uptrend.
We are no Longer in an Uptrend.
Anything can and will happen, we will need to be keen observers of a number of indications which were
outlined in prior posts this weekend.
There is no easy answer, none. Price will tell us evrything we need to know.
Beyond Price, many of the Fundamental Vectors have been discussed repeatedly... in enough detail to
priovide consideration(s) of the "Potential(s)" - this week is extreme in its importance.
My intentions are to trade the Micro (15min) Objectives cautiously, not a Buyer, but a Seller.
Buying the expected retracements has been wildly profitable, this too shall pass. We will limit any BTOs
to 1/4 Size and now that we will no longer be able to Hedge SEP/DEC after Rollover, as the March spreads
will be 120+ Ticks wide AND VX is price up Implied VX so the cost of PUTs are now begining to become
less than desirable... the Challenges to Fix any poorly executed enteries - is negligible.
In this type of environment, it is best to move slowly, methodically and observe the Tape. There is no
substitute for Screen Time and observing the Key Periods when the Markets react. We have defined these
times clearly - the "reaction times of day" - they should be well ingrained in those who are consistent
readers of this Forum/Blog/Hub.
Patience will be the best modalility for Trading this week, it will be quite violent. Be quick, book profits
of size when you have them, DO NOT under any circumstances - OVER-Trade. It is temtpting to press Sells
and let profits run when they are growing significantly.
This week will take them away at some point, as the Volailtiy will cut both ways.
We are closely watching the VIX at its upper Boundary of 22.52. As well, the VXN has been very reliable
as an indicator for the NQ.
Financials are a complete mess, we have BANK ranging between 4400 - 4500 and Yields becoming
unsettled as the BOND Buyers missed an important Cross that has been setting up for several weeks.
Bonds Sellers are in control now, Wednesday - Friday will confirm the BOND Markets issues.
The Dollar will re-confirm them.
Be well and Trade Cautiously - HK
