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ES Does a 180-Degree Round Trip. Who Has the Upper Hand?
Now that the e-SPZ has recovered two-thirds of its post-Jobs plunge, does the strength represent the establishment of a significant pullback low ahead of still more strength within a larger-bottoming process, since the third week of Sept, or, another sharp-recovery rally within the dominant downtrend that should be used to lighten longs or to get short?
I will let the market tell me which scenario is correct.
If the e-SPZ climbs above 1930 and holds, then the action will neutralize the post-Sept 17 downtrend, and will point to still-more strength towards 1960/70, thereafter.
Conversely, another failure of the index to punch through resistance between 1925 and 1930, followed by a downside-reversal signal, will preserve the Sept-Oct downtrend, and the distribution pattern of lower-highs exhibited during the last 2-1/2 weeks.
