ES Journal - 2021/2022

[wiesman02]

One of the biases you can use intraday is that there's a high chance we'll take out either the prior day high or low.

Those who say the market are random and unpredictable can't deny that we just reversed + 2,50 points above yesterday's high. Clearly a non-random reversal point and easily anticipated in advance.

With that bias already "used", there's less to lean on, so the "conservative" and safe target is already tagged.

There's a lot of tails coming out of this 3730 zone on the hourly chart - which means a failure to breakout certainly is something to consider.

But if the breakout is successful, I don't see why we can't see 3750 or even 3770 by the Close.

And as I'm writing that the market is pulling back substantially. Meaning we have a failure to breakout for now. Probably a good time to sideline unless you have a nice short entry on.

Yep, that and the majority of the daily range was already probably in if u use bar / candle analysis on the daily chart.

 

[mervyn]

I don't know if anyone noticed but yesterday $SPX made its lowest close of the year. Lower than lowest June close.

so it is a floor

 

[SunTrader]

so it is a floor

If that is a question, time will tell. Otherwise right now, doubtful.

 

[mervyn]

done for the day, can't be greedy, a very good day for me at least.

 

[BeautifulStranger]

US 30 year Treasury bonds made a new low on the Day / Week / Quarter / Year.

 

[mervyn]

US 30 year Treasury bonds made a new low on the Day / Week / Quarter / Year.

ZB will go much lower by Q2 next year, but hard to trade if you don't have patience.

 

[BeautifulStranger]

ZB will go much lower by Q2 next year, but hard to trade if you don't have patience.

Interest rates were low for a long time. It is hard to appreciate the impact of rapidly rising rates and the yield curve inverting. The following is a list of effects:

1. Higher financing costs reduce corporate profits, increase risk of bankruptcy, and can cause dislocations in the labor market, affecting consumer confidence, business confidence, and investor confidence. When confidence is lost, spending tends to be reduced.

2. Consumer disposable income is reduced resulting in less demand for discretionary goods leading to lower corporate profits and their capital spending, affecting other industries.

3. Rising rates makes fixed income more competitive for investors’ dollars.

4. Stock valuations become relatively higher for those who use a discounted cashflow model resulting in a much smaller universe of perceived worthwhile investments.

5. Relatively higher US interest rates versus other countries causes appreciation of the US dollar, resulting in our exports becoming more expensive to foreign buyers, usually reducing demand, assuming US corporations attempt to maintain their margins.

Long term rates have roughly doubled and represent a major economic and equity market headwind. In other words, to quote one of our own, “Lifts are gifts”.

 

[Laissez Faire]

Interesting reversal. Just watching this from my phone.

June lows in play then?

 

[DevBru]

Interesting reversal. Just watching this from my phone.

June lows in play then?

It depends how you look at it, the June lows in the December contract have broken.
The June low for the September contract was 3639 and hasn't been reached yet.

Edit: it just reached 3639 as i was typing this.

 

[Concinnity]

Interesting reversal. Just watching this from my phone.

June lows in play then?

It pretty much did what we discussed yesterday, just needed to get enough people looking long and shorts out before busting the lows. Not going to pretend like I traded it well today, because only took one trade for very small profit. Kind of let other factors shape my view and lost conviction.

With that said both NQ and RTY have not yet taken out there June lows, so doesn't really change that much for my personal perspective and view. Still higher chance they eventually do as well, than not.