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Thursday, September 01, 2011

Which face will you be wearing tomorrow?...

Each candle on the chartgrid below of the YM, ES, NQ & TF represents 3 days...the last red candle closed today and formed a bear harami shooting star.

Before I get too excited about a potential drop beginning tomorrow, I would offer the following 4-hourly chartgrid of the YM, ES, NQ & TF. Today, for the third day in a row, all 4 e-minis again rejected a bid to move much further above the major pivot high set in mid-August on this timeframe. In fact, the YM, ES & TF closed just below this pivot high, while the NQ closed just above it today. They will have to break and hold below this pivot in a move that has both volumes and momentum behind it and close lower...ultimately, they will need to break and hold below their last swing low set on August 30 in order to break this short-term uptrend (August 30 was the first day of the above referenced harami shooting star)...please note that the TF broke and closed below this pivot low today.

Overlayed on each 4-hour chart below of the YM, ES, NQ & TF are 2 regression channels. The longer downtrending channel runs from the beginning of May of this year for the YM, ES & TF and began in late July for the NQ. The shorter uptrending channel began on August 8. At the moment, price is holding above the "mean" of both the longer and shorter channel for the YM, ES & NQ, while price closed below the "mean" of the longer channel and at the "mean" of the shorter channel on the TF today. A break and hold below these intersecting "means" (with conviction) could spell more downward movement ahead. The NQ is still leading in terms of strength on the upside, while the TF is the laggard.

As usual, I'll keep an eye on Gold, the US$, EUR/USD, Oil, TNX, TYX, XLF, GS, CRX, and the VIXs to see whether they continue flowing in their respective directions after today's actions as shown on the Daily chartgrid below and look for corresponding bearish or bullish confirmations.