Weekend Update - ES

ES
Another push higher in the equity markets this past week, however, Friday put in a bearish engulfment candle.

It's still unclear to me as to what the bigger picture structure is tracing. There are multiple options that may be going on here.

I show a count that I'm reasonably satisfied with off the 1015 L (pit session) on the intraday 15 minute chart. This interpretation has a minute degree [iii] wave completing at the 1093.25 H.

If correct, we would be tracing [iv] currently with [v] up to follow. What this minute structure would finish of a larger degree is up for debate.

I don't think you can dismiss the alternate view of a double zigzag, or abc-x-abc. This would suggest an expanded flat scenario, or possibly a running triangle.

Regardless of what this leg turns out to be, RSI has been registering negative divergence. It warned all week that price was setting up for, at minimum, a temporary retrace.

I wanted to show the monthly chart again. Notice that price ran into the channel from the 2007 H.

We actually penetrated it slightly, before being turned away and closing below it. It should be noted, on a log scale, the channel won't come into play until somewhere around the 1125-1130 area it appears.

One thing that should stand out, is where the 200 sma is currently located - right on top of the 50% retracement level.

The short-term stochastics is pegged out and RSI has run into the 50% level. Several confluences here suggesting a break from the upside price action may be near at hand.

I periodically show this OEX weekly line close chart that I pay attention to.

I have had the fibonacci time extensions on for several months now, however, I had never put the retracement levels on.

Perhaps we get to the 50% retracement level about the same time as the 50% time extension, which is November 13. Then again, maybe we never make it to either one.

Bottom line - near-term appears to need another leg higher, assuming the alternate count is not at play.

I feel a very tradable man-sized correction coming very soon. Would not be surprised to see a 100 handles (or more) given back. Not sure it would be the end of the bear rally - though it certainly could be.

Stay on your toes.