The Overnight Bounce Didn’t Turn Up, And ES Is Tipping Over

Well, I was waking up this morning expecting the start of yet another [bunny fingers] bull bounce, after seeing prices grind most of yesterday and then lift themselves prior to the close.

We have seen this for what seems like most of this year. The end of day moves negate the early day’s moves, and the overnight recovery move gets started in earnest.

This morning however price has started to tip over and, as Shakespeare once writ, “Is this a Bear Move I see Before Me?” Or was it a dagger? Either way there is blood on the metaphorical street this morning, with the overnight moves pumping lower for a change, breaking the recent pattern.

As you may or may not have noticed I’ve been heavily bearish all through August waiting for September, and doing my best Sean Bean impression. “Bastard!” No, the other one. “Winter Is Coming!” And indeed we are in bear season, and winter looks like it’s nearly here.

Market Snapshot

The market has broken with several months of established practice by falling overnight. No statement has been issued and none is expected.

• ES 7,660.75, down 40.50 (0.53%). Near vertical overnight, and it started right at the European open. Full read below.

• BTC 77,924.98, down on the day. The trade is rolling over still. Full read below.

• Uncle Russ (RTY) 2,942.7, down 16.2 (0.55%). Once again leading the bear charge very firmly, and already back in the vwap 1sd zone.

• NazQuack (NQ) 29,259.50, down past 1%. Never made it out of the 1sd bands, and moving from the upper band to the mid band.

• Uncle Dow (YM) 52,978, down 278 (0.52%). Making the same pattern.

• VIX 15.69, up 0.76 (5.09%). Jumping higher correspondingly. 16 is still my “holy shit, this is it” level.

• Gold 4,426.0, down 71.3 (1.59%). No read today.

• Crude (CL) 87.86, up 1.55 (1.80%). No read today.

ES Futures – The overnight moves pumping lower for a change.

ES dropping through the prior swing low, and near the last new all time high. Around 7,650 on ES futures will trip a few things. Lower lows being the obvious one. Prior new all time highs being reclaimed, like a support break or a break back into a range play. Also price moving back into the vwap 1sd zone, which could now suggest a move towards the 7,400 zone.

The stock indexes are looking more bearish as the time goes on.

All in all it’s looking good, as I gleefully run my hands together like Old Fagin.

A quick look at the details of the overnight ES moves shows that it’s a near vertical move and, before I get over excited, or is it too late for that… the near vertical move started right at the European open.

At the time of the screenshot my sanity check was that it was only a 0.5% move, still kind of in that normal range of movement. But sheesh, we have been looking at 0.1 to 0.3% abnormally low volatility moves, so this seems ridiculously massive. As I type, 0.6%, with the Naz just pushing past 1%.

Meanwhile, poppers keep popping….and students are getting paid….

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Crypto, BTC – The trade is rolling over still.

Interestingly, I placed a small trend line, for fun, last week, which was a clone of the leftmost upsloping trendline I used to describe the rounding top last week. All I did was invert it so the angle remained the same but pointing the other way, and then placed it around the last peak.

What we can see is that price has just about nudged it before starting its push lower.

I may have to break the cigars out.

Meme of the Day:

Trade well,

T2 Markets

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