Yesterday we were noting that the ST trend was neutral, with potential bounce coming, as FGSI had set up both bullish and bearish EE, but was at extreme pessimism, indicating at least a ST bounce. Buyers took full advantage of that though and after the initial failure at ML, rocketed past ML and macro-ML in a giant vertical move. We also had another push into the close, before the market finally gave up and dropped quite strongly to the prior consolidation area.
The o/n didn't bring too many developments. Buyers held the consolidation area where price stayed after the initial rocket launch and then buyers managed to psh back towards yesterday's high. This is now a big inflection point. If buyers can power through we will likely get more immediate upside. If they fail and price comes back below danny, then a consolidation down to 400bar MA or even ML is possible. FGSI did peak again at extreme optimism, so at least a ST pullback would be warranted.
Yesterday we were noting that the ST trend was up as buyers had held another ML test and bounced off it. Indeed from our post, the market consolidated briefly, then ramped another 50+ points to breach 4500. The RTH session was a "ramp 'n camp" as after the initial push, there was a choppy slow grind.
The o/n saw a pullback from those new highs and we again had buyers being inefficient, which was a warning they might not be able to sustain such a relentless push. And now we dropped into yet another ML test. As we kept mentioning, ML is the KEY level for the main trend. If buyers can win back ML, then this is just another small dip to be followed by new highs. If ML is lost on a sustained basis, then a trip to macro-ML (aprox 50 points lower) is possible and likely next large inflection point.
Yesterday we had a huge reversal day and up squeeze. FGSI and IGSI both signalled an unconfirmed low at the o/n LOD, and those have the potential to be explosive set-ups. Yesterday didn't dissappoint, for sure. After the o/n LOD was touched, the market went straight up with little to no pullbacks. During RTH we had a drop and retest of macro-ML, but that was quickly brushed off and mkt rocketed to new highs to close near HOD.
The o/n was perfect for buyers. We had almost no pullback with price going only sideways after which another push higher started. FGSI is starting to show extreme overbought conditions as price is pushing into sell zones, but the buyers seem very determined and just push higher and higher. Sellers on the other hand are VERY inefficient, tiny pullbacks in price lead to big declines in FGSI, which means they are likely to continue to get squeezed. The 1st step for sellers would be to break below the danny line. As long as that holds as support, the immediate up trend is intact. Once danny fails a pull-back to back-test ML would be expected. There we will have the next big inflection point. If the newly found up trend is to be kepy, ML needs to hold. FOMC today, which should provide fireworks, large moves expected. As usual the "real" direction after FOMC will be seen only tomorrow and with this week being OPEX, that just means more volatility and wild swings in both directions expected.
Yesterday we were noting that the ST trend was neutral as both sides were inefficient via FGSI. The latter was showing a potential large divergence set-up, which normally points to a large decline (80-100 points). It didn't play out exactly, as the prior high was surpassed, but it proved to be correct in the end. We did mention "4400-4420 area has a lot of resistances (classic TA - descending trend lines, 200DMA and BC on daily) and is a VERY tough nut to crack, so risk/reward doesn't favor longs here". The market stopped right near 4420 and then dropped 100+ points.
The o/n proved that sellers were indeed in full control. It dropped to test the important 4280 support and bounced 80 points, with buyers attempting to win back ML, but failing spectacularly after that. Now buyers are attempting to hold the area near the prior higher low from the o/n and FGSI is showing a potential unconfirmed low here. That doesn't mean the decline is over, but if buyers do manage to step in here (break above danny would help), then we might see another ML back-test, which would then be the big inflection point (ML is key for the near term trend). For now sellers are in control, at least until buyers can win back ML on a sustained basis. So bounces are sell opportunities, until proven otherwise.
On Friday we were noting that the ST trend was neutral as the market had consolidated in the o/n following the push on Thursday and was back-testing ML. We did mention that "As long as buyers hold ML, they could continue to push higher immediately" and that played out nicely. ML held price and buyers pushed to gain macro-ML as well, which had a text book back-test before the final push upwards. Mkt closed Friday' session at the highs, which proved to be a bull trap.
Sunday opened with a huge gap down based on the escalation to Russia-Ukraine conflict and the 1st use of the words "nuclear deterrent". Despite the big gap down, sellers didn't accomplish too much, as buyers managed to step in and stick save ML. Further on, sellers dropped the ball as FGSI showed they became inefficient on pullbacks. ML continues to be the KEY line in the sand for the ST trend. If buyers can continue to hold it as support, this can go to RTH gap fill which will be the next upper inflection point. Alternatively, if sellers manage to break below ML and take out the 1st bearish EE level (just below ML), then that would indicate that this decline wants to go deeper.
On Friday we were mentioning that the ST trend was neutral as despite earnings misses from 2 heavyweights (AMZN and AAPL), the decline was contained. Price just came to test ML and sellers were unable to push too much below it. FGSI was showing both bullish and bearish EE in a sign that the ST trend was up for grabs. We did note that a breakout/down of that EE would signal that one side is taking control and that side was the buyers. As soon as 4575 broke, buyers pushed strongly and finished at the highs (new ATHs).
Sunday saw a continuation of the up move, with new highs being reached. We had an unconfirmed high on FGSI and pullback from there. That pullback was bought today and we are currently at new highs and ATHs again. FGSI is showing the "up squeeze" set up, as it's declining fast off extreme optimism, while the danny line is holding as support and price keeps making higher highs.
So the ST trend remains up, despite the ST overbought condition. The 1st signs that it will let up will be a failure of danny to hold price. Next support below that is 400bar MA and below that ML. We do have FOMC starting its 2 days meeting tomorrow and announcing its decision on Wednesday, so that will definitely be an inflection point timing wise.
Yesterday we were noting that the trend was neutral as both sides were showing inefficiency via FGSI. Because of the set up on all ST GSIs (FGSI, IGSI and MGSI) we were mentioning that a bigger low might have formed at Monday's lows and that yesterday's action would be key for the intermediate term. ML being the main line in the sand for the trend. The buyers did everything right after the cash session open. They broke above the opening BE and then simply sliced through ML and never looked back. The breakout was very strong and considering the bigger low potential from Monday, the buyers are now back in control.
The o/n continued to show the buyers are regaining strength. It continued to make new highs and most importanly - the IGSI "reloaded" quickly on a small retrace, triggering a very large bullish EE. With ML below price and continuing to be drawn higher and higher, the sellers need to be careful here and wait for a clear set up before trying to jump back in. We do have FGSI at extreme optimism, so an immediate term pullback could occur from here. Momentum line and danny will be the clues if that will occur, as they would need to give way. So far danny has held support very strongly, so it won't be an easy feat for sellers to pull off. If danny gets broken, an ML test would be expected. That would be the inflection point. There is still a slim chance this face ripping rally off Monday's lows is just a dead cat bounce, but it is getting very slim. Only a break below ML would tilt the odds back towards that bearish scenario. Buyers need to defend ML at all costs, while a green day today would be ideal (follow through to yesterday).
Yesterday we were noting that the ST trend was down, with a potential bottoming attempt (as FGSI was showing an unconfirmed low). We did warn that the bottoming attempt was only a potential as if sellers continued to push, that could have been broken. Sellers did just that and continued to break lower almost the entire cash session, until the last 30min when buyers stepped in and staged a larger bounce. The follow through on the downside after Friday's bearish session is a serious warning a larger shift is at hand (from full-on bullish to a bearish stance), so longs do need to be careful here.
The o/n continued higher building on the late bounce from yesterday and a bigger dip showed sellers were inefficient, so the trend went back to neutral. Boths sides are inefficient as shown by FGSI, so the ST trend is up for grabs. A ST bounce after the sell off from the last 2 days should be expected. The only question is if it's just a dead-cat bounce or are buyers ready to step back in with authority. We do have the potential for a big low at yesterday's lows with IGSI and FGSI showing that low to be unconfirmed and MGSI touching extreme pessimism there. So there is a possibility that the correction is done and market runs back higher. However buyers need to prove themselves now, as the last 2 days were showing a change in character with the bounces failing. ML is, as usual, our main line in the sand for the trend. It was decisively broken on Friday and yesterday there was only a feble attempt in the o/n to touch it. So the ST trend was clearly pointing lower. Now this bounce took price right to ML and it's just whipsawing around it. That means the current area is an inflection point. Depending on which side of ML the price will settle will dictate the near term trend. The bullish and bearish EE levels on FGSI will be additional confirmation after that.
Yesterday we were noting that the trend was down, but with a potential bottoming attempt as FGSI was showing unconfirmed lows. Turns out the actual low was a few points away on yet another unconfirmed low on FGSI, then market bounced again very strongly from there. However, differently than in the other situations in the last 2 weeks, the bounce was stopped by ML which held as resistance.
The o/n came to the buyers' rescue and after a sideways action both up and down, there was yet another strong bounce which did manage to break back above ML. Now, as I have been repeating like a broken record - ML is key for the near term trend. Buyers winning back ML is a strong statement they are trying to get back in the lead. FGSI is showing an unconfirmed high at the o/n high and market pulled back from there to test ML once more. That triggered a pretty large bullish EE, so now this is where it gets decided. ML is the big inflection point going into today. If buyers manage to defend it and bounce, then the trend is back to up and we could be getting back to the usual up grind. Especially if they can turn the unconfirmed high on FGSI to a confirmed high. However, if price breaks back below ML then that would signal more bearishness ahead.
Summary: all 3 GSIs had unconfirmed highs at Monday's high, which means we are at an important inflection point. Sellers continue to be inefficient, however if FGSI breaks below a bullish EE level that would be a big warning that we might get a bigger correction. If the bullish EE level is defended, then another squeeze into the highs is possible. TT signals (danny, momentum, 400bar MA and ML) will be helpful in identifying early which scenario will play out. Breaking below ML would be a big statement from sellers (which would coincide with breaking the bullish EE too).
ST trend: up, with reversal risk
The late Friday melt-up into the long w/e produced extreme optimism on FGSI and then a series of unconfirmed highs. However Sunday and Monday saw price action continuing to grind up, while FGSI showed that sellers were extremely inefficient on all pullbacks which led to more and more highs. We currently have 2 unconfirmed highs on FGSI, from where the market pulled back, but again sellers were very inefficient and generated bullish excess energy (EE) vs the prior trip here (close to extreme pessimism). That is a 1st important level, if sellers are going to take initiative they would need to break below. If that happens, it would be a sign that at least ST, the character of the market is changing. Buyers are favorites now, so they simply need to defend that level and if so, then another trip to the highs is very likely.
IT trend: up, with reversal risk
We had some interesting developments also on the longer term GSIs, so we will cover them today as well. IGSI moved similarly to FGSI and made a big confirmed high on the open on Sunday, but then pulled back strongly, while price continued to grind higher. Now it dropped to below mid value after it put in an unconfirmed high at Monday's high. That sets up class B bullish EE already and means another squeeze up is possible. However, if FGSI breaks the bullish EE level, then we need to start watching the bullish EE levels on IGSI as breaking those would be more serious.
MGSI peaked and made a confirmed high at extreme optimism levels, which is again a warning this rally is getting very extended. It also started to pullback from there, while price continued highs, which makes Monday's high unconfirmed also on MGSI. A bigger pullback from MGSI extreme optimism is likely, the only question is if we will get one immediately or get another squeeze higher first into a clearer unconfirmed high.
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