ES Journal - 2023/2024

I need to kvetch. I'm such a jackass. So so stupid! :banghead:

Does anyone know exactly why ES topped out at 4109 today? At the time, I didn't understand. Well, now I know.

I was so wrapped up with THE trendline, I didn't realize there would be another trendline. Once we passed above THE trendline, I thought we were done with 4000.

Here is the chart I was monitoring at the time.

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And here's the trendline that passed undetected well below the radar.

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Moral of this post: Don't get so caught up in your own narrow views.
 
LT trendlines for ES will vary depending on the data and time period used. I wish TradingView had backadjusted futures data. The S&P 500 cash index already backtested the LT trendline and is moving higher.
 
schizo said:
It doesn't look like the technicals. It pierced above the TL just fine, but why it retraced back below is a mystery.
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Didn't I say the HOD would most likely come in the last hour and that 4100 would be a point to start considering an exit? :)

I'm not sure trend lines is a factor, though.
 
Trend lines

Funny how everyone's chart are looking different.

I think this must come from different ways to draw them AND also using different trading hours. I use the US Equities RTH session strictly which should be the same as the cash index. I don't think TradingView offers that one, but will let it go all the way to 16:15. And that's fine. Some like to use that. I don't.

For me, I resolved most issues when I stopped using or expecting trend lines to be a precision tool. I consider it more of a rough tool and support parameter which could give an indication of where we're going and where we might start looking for a turn.

If you consider a what a trend line or channel is - it's basically a measured move and an indication of where and how the market is moving. Sometimes these are surprisngly accurate. Other times they're more in the ballpark.

I tried to work out some rules for how to use trend lines, but you very often get edge cases which will challenge those rules, i.e., some times it seems to make sense to include a spike high/low. Other times not. So, to me, there's some artistry involved here.

When a trend line is perfectly respected to the tick I consider that more random than anything else, but trend line believers will discard every other time where the trend line was overshot/undershot.

The major trend line I have drawn on my daily chart certainly had the market closing above it on Friday. I don't pay any special significance to that, though. We're headed into some major possible resistance in this area still, so I'm very cautious to the long side here.

Next week there's also the FOMC on Wednesday which can really f''k with everyone's trend lines. LOL. :)

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Similar view on SPX Daily. Which also highlights why I think we're in a potential sell zone. Personally, I think it'd be nuts to start shorting on that basis alone. So, I'm not. But I'm paying attention for sure.

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Monthly supply/demand on SPX below.

Currently bounded by supply at ~ 4150 and demand at ~ 3600.

upload_2023-1-28_13-50-37.png
 
Had few minutes to do some bigger picture analysis. As of now, still project we will be up for Q1, but February could be a little more challenging than January - not typically a really strong month from a seasonality perspective. I'm seeing a pattern on RTY weekly which typically suggests a down move (for this upcoming week) so keeping that in mind, along with how I read VIX. Expect bitcoin and long-term bonds to be up for Q1 as well so I don't see the market falling off a cliff. Just my 2cents

Related to this, the equal-weight S&P 500 has been leading this rally until recently (see the ratio line).

upload_2023-1-28_11-8-35.png
 
Laissez Faire said:
If you consider a what a trend line or channel is - it's basically a measured move and an indication of where and how the market is moving. Sometimes these are surprisngly accurate. Other times they're more in the ballpark.
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Well, yes, that's kinda no brainer. But here's what I think most people don't understand about trendlines. While you need to connect two dots to draw a line, you need THREE TOUCHES (or more) for it to be valid. A two touch trendline is not very reliable. Otherwise, it becomes too subjective and willy nilly.

upload_2023-1-28_11-55-26.png


upload_2023-1-28_12-1-27.png
 
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