ST trend: up (with pullback in progress)

First off: Happy New Year! Welcome to 2022!

On Friday we were mentioning that the ST trend was down, with potential bottoming attempt. The market had finally broken the 4770 support and fell to macro-ML quickly after that (as warned it would happen if ML and 4770 would give way). Price was just retesting 4770 and our expectation was that it could be just a reflective bounce. The market proved our expectations correct as it failed on the 1st back-test of ML and that important area and fell into another macro-ML test. Then another bounce, a spike above ML to 4780, then again failure and sell-off to macro-ML. Basically the entire Friday session was a chop between 4780 and macro-ML. Buyers held macro-ML, so that at least gives them some hope of holding the up trend.

The New Year brought some support for buyers as we gapped up on Sunday above ML and buyers were able to hold it on the back-test. Then they made another high above 4780, although they stopped 10 points higher. Now we are seeing a pullback from extreme optimism on FGSI into yet another ML back-test. The fact that buyers held macro-ML and won back ML, gives them hope that they just might stick save the up trend and resume the move higher. They are definitely not out of the woods just yet, so they need to keep holding these important levels and push higher to avoid a longer (and deeper) consolidation. They have not shown too much efficiency on FGSI or IGSI, so there are still some issues. Nevertheless, as long as ML and macro-ML are below price, buyers have the edge, so that needs to be respected until those levels fail.

ST trend: down (with potential bottoming attempt)

On Wednesday we were mentioning that the ST trend was neutral as both sides were inefficient via FGSI and set up both bullish and bearish EE. Those levels were mentioned as important for breakout/down. The market dropped on the RTH to test the bullish EE level and held it narrowly, proceeding afterwards into a big bounce that took out the bearish EE level. They definitely won the battle when they held the bearish EE level.

Yesterday saw buyer euphoria continue as the market ramped another 20 points above Wednesday's high. It then started dripping lower very slowly before it picked up speed and outright crashed. From top to bottom we travelled more than 120 points. We do have now a potential bottoming zone. For the 1st time since this big decline started buyers have been building higher lows, despite bearish EE showing up on FGSI. And they have also started to whipsaw danny, which has kept a lid on bounces since near 4700. Buyers are not out of the woods yet, as they have been unable to hold above danny, while FGSI still has bearish EE vs a level that is almost 40 points higher. Nevertheless the fact that danny is no longer capping price is a 1st warning buyers are attempting to bounce back. If they can win back also 400bar MA, then that would be additional confirmation of a bigger low in the works. Buyers need to start holding danny as support in order to avoid a potential run to a lower low.

ST trend: down, with potential bounce attempt

Yesterday we were noting that the ST trend was neutral as both sides were inefficient, as shown by FGSI (something which is happening quite often in the o/n as of late). The market had a big pop prior to the open, then a few whipsaws before finally dropping hard to retest Wednesday's lows before rallying hard into the close and retest the highs of the day.

The o/n now saw the market moving sideways and then starting to drift lower. FGSI is showing extreme pessimism already, so a bounce might be attempted, but it it also showing confirmed local lows, so the decline might extend. We have a bullish EE lvl vs yesterday's LOD, so that levels becomes important if we do in fact accelerate lower. The biggest problem for buyers is the fact that they lost ML, then tried to win it back but failed.