ST trend: up (with potential topping pattern)

Yesterday we were mentioning that the ST trend was down as price made lower lows in the o/n and buyers had stepped in to push a bounce into a ML back-test. We noted that what would happen at ML would be important. Price was indeed rejected at ML, went lower to test the o/n lows, before staging a very impressive rally all the way to macro-ML. Then the market did the same as the prior day (similarities to which we noted as well). It went to macro-ML and failed there quickly after, lost ML on the way down and came back to the lows, erasing almost the entire pop.

The o/n proved once more that the market likes to trap both sides in this high VIX environment. The close near the lows was a trap and the market ramped 90 points o/n. Buyers won back ML again and erased almost the entire drop. The action is likely to remain volatile (with VIX at 35+ it's no surprise) and even if buyers managed to step in hard, the next inflection (area near yesterday's HOD and macro-ML) is important to keep an eye on. If price stalls there and buyers fail to make head-way above macro-ML, then we could see yet another trip to the lows.

ST trend: down (with potential ST bounce attempt)

Yesterday we were noting that the ST trend was neutral as both sides were inefficient via FGSI and ML was being whipsawed in both directions. We did mention that "ML is still a key level so if one side manages to sustain a move above/below ML, that would be important to consider". The market obliged. Once ML was lost on the downside, sellers never looked back. Price grinded lower the entire RTH session with only a feeble bounce attempt late morning, which was quickly exhausted and we closed at the lows.

The o/n proved once more that closing at the lows is a trap, especially during OPEX week. We bounced from the lows right into a ML test. ML capped price with ease and the market kept making lower highs, until it finally plunged on yet another Russia headline. The biggest problem for buyers is that this decline was so large that it took out yesterday's lows (which were unconfirmed on FGSI). So while FGSI is at extreme pessimism and could trigger a near term bounce, because the lows are confirmed now, more work is likely needed before finding a bottom. Bigger picture, sellers are in control until ML is won back in a sustained way. Today is OPEX, so expect whipsaws in both directions. Due to the large drop from yesterday, market makers might be incentivised to push this higher, just something to be aware of.

ST trend: neutral

On Friday we were noting that the ST trend was down, with potential bottoming attempt, as we had an unconfirmed low on FGSI and buyers were attempting to bounce from that area. We mentioned danny and 400bar MA as being important near term, while ML test being the "real test". Buyers did manage to test macro-ML after breaking danny, but were quickly rejected there. However they managed to hold a higher low vs the unconfirmed low and then staged a very impressive rally to win back macro-ML and ML, before peaking in the same 4530-4540 area. The decline into the RTH close was vicious and broke back below ML.

Sunday's session didn't do much, price whipsawed around ML neither side being able to make the breakout/down stick. Today followed the same pattern, with price spending actually more time below ML than above. Nonetheless buyers are attempting to breakout again now. We have both bullish and bearish EE on FGSI, so those lvls are important to confirm the direction after price moves away from ML.