Ep197: The Overnight Bounce Didn't Turn Up, And ES Is Tipping Over

For what seems like every morning this year, you could have counted on an overnight bounce to bail the market out.

Last night it didn't turn up and the S&P went vertical overnight in the wrong way from the European Open.

So here's the level that decides whether this is the one and this is the start of it.

what happens when the bounce stops coming in for me personally i think that the failure of that pattern that we've been seeing at the end of the previous day and the overnight kind of start of recovery when that recovery bounce stops are we starting to see a different narrative unfold in the market and i've been heavily bearish to august waiting for september and as i look at the morning charts and my finally seeing this bear move start to unfold again what we can see at the time of this this was about 20 minutes it's about four or five hours before the market opens just with the advantages of the uh the time zone that i'm on but we can see the lower highs and we're going to start to see the first lower swing low being broken the previous swing highs being taken out we're already starting to see that on futures that prior new all-time high support acting as resistance.

The Nasdaq just hasn't attempted any new highs despite the exuberance of the AI sector kind of carrying the markets on their shoulders.

The Russells double-topped it, just peek-a-booed above the new all-time highs and then turned around.

You see those lower highs developing.

These lines on the chart, these are the VWAP 1 standard deviation lines from the prior rally low back in April.

And what we can see is that price has reliably, when it's come back inside these lines, trundled down to the VWAP line.

So we can at least, if it's not going to be the huge crescendo of the bear move you know could we at least see a push down to the the view around 7400 on the s futures uh we could see it on the down get down to 51 000 not a million miles away uh from that level on the now stack we're already pushing from the upper to the view up line so could we see the view up push to the lower view up And again, the Russell, it's already making a charge down there.

The key number for me still is going to be the 1,600 level.

Approximately 1,600.

The cat's whiskered above, but just to round it off.

1,600 on the VIX, rather, is what I'm eyeballing as the...

Okay, well, the volatility meter is now getting exceptionally spicy.

We could see things spike up at that point.

So looking at the S&P, again, we can see the drop really started at the European Open.

We just get a little double top, and what we can see here, the VWAP lines, this is a two-week VWAP, the VWAP lines really acting as a vary point.

It did yesterday, and we can just see those lower highs, lower highs, lower highs, lower lows, just retests the pre-market high, the VWAP high, and then quite literally tips over.

Since the screenshot's gone a little bit further as well, Over on the point and figure, we can really see this 7650 level acting as the pivotal point again.

We looked at it on the Daily Chocolate.

That is that prior swing high, that prior new all-time high.

So if we can take that, there's really free space all the way down to the second quarter.

So we could see a really speedy move should that level get taken.