The dollar backtested the broken white channel midline again, but has failed so far to break back above.
Even with the overnight ramp job, E-minis are contained at this level…
But, the structure suggests a Bat Pattern rather than Gartley, so 1716.86 will remain on the table until ES dips back below the purple channel — currently 1680ish. If it happens, look for a tag of the red “S” later today.
The cheerleaders have worked hard to establish another IH&S, this one targeting 1722.
And, given the support TPTB are lending, it certainly isn’t out of the question — even though the headlines hardly justify it. Even though the US won’t really run out of money until the end of the month, when social security, welfare, military payroll, etc. checks go out, the deadline of the 17th will clearly pass without a deal by both houses of Congress.
It will likely take the dip we’re forecasting for them to get their act together and do the job for which they, at least, are still being paid. In other words, yesterday’s forecast looks just as good to me the day after. It’ll look even better if we can get the rally over with intra-day.
UPDATE: 11:05 AM
SPX just tagged its .886 on breaking news that the shoe shine guy at 6th and Constitution is confident that a deal will be struck.
ES should tag 1717 any moment. Excellent time to short.
Needless to say, if the Senate deal can be sold to the House, there’s plenty of upside in the markets. So, though you probably get tired of hearing me say it, always use stops.
My trading strategy doesn’t hinge on being right all the time (though, it’s always nice when we are.) It hinges on not hesitating to switch sides when it’s apparent that a particular forecast isn’t playing out.
In that light, I’ll review our upside scenario.
continued for members…
Once ES topped 1726.75, the initial upside would likely be to the purple 1.272 at 1750.35.
Cruz is being interviewed right now, and is thought to be backing off on his threat to delay the vote on the Senate compromise bill. Just said he wouldn’t filibuster, but hasn’t said whether he will continue working to block passage. It remains to be seen whether the bill could get the necessary votes in the House.
UPDATE: 3:15 PM
ES on track to reach the small IH&S target of 1722.50 — most likely after the close at the white channel midline. The scuttlebutt is that Boehner will schedule a vote this evening, and will do his best to deliver the requisite number of Republican votes to pass it. I haven’t seen a tally of the hard liners, so it’s difficult to know…
If it passes, we should see the rally continue and our upside targets reached fairly quickly; so, it’s worth being long here with stops around the 1708 level. The larger IH&S neckline (red) looks like it’s about 1713.25 or so.