Macro micro trader

While we were able to capture quite some moves to the downside, it quickly got bought into, although momentum is fading away for the bulls in the immediate term.

ES (4H): As we mentioned in the last week’s and the mid-week update, the momentum has been dwindling down for the bulls and there is still quite a likelihood for ES to break down of this rising bullish channel, all the way towards that daily demand zone of 3950-60 (just below the 20 SMA, currently at 3980).

ES (Daily): And when we zoom out on the daily chart, what appears to be the bear flag, it continues to form while bulls have got one thing in their favour – the trend is decisively upside on the daily. Although they remain sandwitched between the 4H negative momentum and the weekly supply zone.

ES (Weekly): Above the 20 SMA on the weekly but still in that danger zone of the weekly supply zone of 4125-4270.

ES conclusion: I would still sell the rallies and quickly book out as and when opportunity arises. The bulls need momentum on their side which is quickly fading away. For now the first step is to be on the side of money which is selling the upside in the immediate term.

NQ (4H): Same goes with NQ which is sitting just on the cusp of breaking down of the rising wedge, once broken, bears can quickly take it to the weekly demand zone of 12950 and towards another 4H trendline support around 12700, which is where bulls can step in as the trend is still on the upside as shown on the daily chart below.

NQ (Daily):

NQ (Weekly): Even on the weekly, bulls are comfortably sitting above the weekly supply zone of 12950, which might seem to break down temporarily based on the 4H momentum chart as shown above. I would be a buyer on that breakdown.

NQ conclusion: I am a seller here too as the 4H chart favours bears. Although bulls won’t stay out of the picture for long and expect buying to emerge quickly around 12950-800 zone.

YM (4H): Friday was surprisingly positive for the Down Jones Industrial Index and rightfully so. The bulls were still hoping to keep the price well inside and above this diamond top formation, which broke down and backtested quickly.

YM (Daily): Bulls have maintained the price well above the seemingly bear flag and the trend change favours them as price continues to hold above 20 and 50 SMAs.

YM (Weekly): But, the weekly supply continues to haunt for the second week running.

YM conclusion: I would expect prices to crack a bit based on the 4H chart and the weekly supply zone before bulls can capitalise on the bullish trend which is still on their side.

RTY (4H): Rising wedge on the cusp of breaking down here too while momentum too is not on the side of the bulls as depicted by the diverging MACD. I would be seller here too.

RTY (Daily): Even on the daily chart, there is a supply overhang that favours bears in the immediate term.

RTY (Weekly): On the weekly chart though, bulls have nothing going wrong as of now as the price continues to sit comfortably above weekly 20SMA and there is no weekly supply zone in sight as yet.

RTY conclusion: RTY chart is quite contrasting to the other three major indexes as the selling pressure here is more on the 4H chart and the daily charts while weekly chart still not as price negative. I would be selling the 4H rising wedge breakdown on the RTY even as the daily supply favours the bears for now.