Stock Market Levels Reached…Now What? For over 2 years now, we have been using various instruments to forecast the market. These instruments have been the $VIX $ES, $ZN, etc. Most of these instruments have now reached the major support/resistances. Let’s examine each one and see where they are at to forecast the next couple for weeks.
Below is the weekly $VIX provided by eSignal which has an inverse relationship to the US Stock market. Price has bounced off the support at 12.77 and we have been talking about it having a high probability of reaching the resistance at 20.74. This would mean the US stock markets would top out when the support of 12.77 and then bottom when the VIX gets to the resistance of 20.74. Therefore, there is high probability we have reached a bottom for the markets. We now have to wait for a confirmation for this resistance to hold. We have to wait to end of the week to see where we close and then monitor the lower time frames.
Note, there is another resistance at 22.35 which a multiple time frame resistance created by lower timeframes.
Below is the Daily support of the $ES Emini SP500 futures. It has a support at 2070.79 which held yesterday. Right now at market open, it looks like it has broken it but we need to wait for market close for a confirmation. If it breaks this support, the cloud is also right below it too so it has a double support.
If the support holds, the markets will go higher to retest the pivot high. If the support breaks, the markets will have a high probability of getting to the support at 2035.65.
Below is the weekly chart of the Russell Futures. We wrote an article last week when the markets were going higher on the overall markets. Here is the article so you can read the comments: https://www.ichimokutrade.com/c/futures-2/everyone-talking-about-russell-breaking-out-higher-true-or-false/
Overall, the Russell has been the “laggard” on the markets going up. Therefore, we were monitoring the major resistance on the weekly time frame to see if held or broke. If it broke all the US stocks markets would continue to go up. If the resistance held, it would increase the probability of markets going down.
Below is the current chart for the Russell Futures. Notice, we reached the major resistance at 1182.60 and held. This increased the probability of the markets reaching their tops and reversing especially with the VIX reaching the major resistance too.
On a side note, notice the 10 Year Treasury Note Futures. We have been consolidating between 129’052 and 131’019 the entire year. Last week, we broke the resistance and now have a high probability of reaching the resistance at 132’004 and 133’015.
In summary, the $VIX got to the support, the $ES got the major high, the $TF Russell got to the major resistance all at the same time. This caused the markets to go down.
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