Days like today, the indicator does not tell you much of anything when both ES and SPX are in total disagreement even if price direction is the same. Knowing the sentiment is important, and in the case of the futures chart, it is bearish.. So bearish in fact that the ST pointing down and in OS. Yet the SPX just entered into its OS range in the intra-day charts. This is the case where one must look at the longer-term views to gauge which side of the trade has a low risk.. high reward possibility. It is also why I am still bearish regardless of the rally that has been taking place to new highs for the ES but not for SPX. I may miss out on this rally but I would rather be safe and confirm the uptrend first.
MT: UP
ST: UP
PA: DOWN
Even our ST and PA are in disagreement today. But it's always the case when we are looking at short term sentiments. It gets more volatile as you go down to the smaller time-frame even. So know your comfort zone and stick with a simple chart instead of listening to other chartist tell you that you need 4 or 10 indicators to be able to accurately analyze the markets.
Keep an eye on the 60min. chart tomorrow to see if the OS sentiment is still intact. If so then lower prices ahead. An exit says we are done going down for now.
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