The playbook in the last 5-weeks has been clearly laid out for S&P / Es1
1. Sharp correction from the 16-17 July into the end of July/ start of August following the path of 2000 and 2007 (7% to 11%)
2. Sharp recovery that results in it getting back towards the all-time high and possibly even making a marginal new high.
3. Then, potentially, the real move lower begins?
Within that roadmap there is then the need to try identify any signs that the rally may be lagging/turning
Today is an "Amber Alert" day in that respect. A little drip that could turn into something much bigger. A little "leak in the dam"
Both Es1 and NQ1 are both presently on target to post bearish outside days at the top of the 2-week recovery on the back of daily closes below 5,613.50 and 19,772 respectively- IF seen.
In addition, they are both presently below good horizontal supports at 5,601 and 19,654-19,717
In the July peak the NQ1 chart gave the "early warning signal" by posting a bearish outside day at the peak on 11th July. Es1 did not post a bearish outside day then and continued upwards for another 3 trading days before rolling over.
Therefore a "double outside day" if seen needs to be respected.
Of course, we have Jay Powell talking tomorrow and that can clearly influence things, and daily closes often give head fakes that see no follow through.
Despite all of this, these closes, IF seen will be the first sign that trouble could shortly be brewing
