This is the move we were prepping for yesterday, again patience has been one of the hardest lessons for me, but it has paid off thus far. As you can see, 3C is NOT confirming the move higher in ES; this is to be expected as the point of the volatility shakeout is to sell in to strength. As for reversals off this move, there are several concepts that may clash with each other today, 1) the market rarely holds large early gains (or losses) this early in the day, lately though as you may have seen in my last volatility chart, we have seen the market do so (over the last week +) with the market opening at lows and closing at highs and vice-versa, so while the trend is to be respected, it's clearly starting to unravel. The second concept is the same as yesterday, "Reversals are rarely "V" shaped" and as we saw yesterday they typically take some time. Other than that, this is where we want to be looking at shorting in to strength.
Thus far the ES CONTEXT model remains supportive of these higher prices and apparently it has head room for even higher prices as the model is still quite a bit above actual ES.
As I said, yesterday was a day for patience, today is a day for action.
I'll do my best to keep you updated until the servers are reset.
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