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2023 November 1 ES Monthly Candle

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11/1/23 Monthly

Temet Nosc,

Tonight the November 2023 Monthly candle appeared and it ushered in a little bit of good news to ease the pain. The monthly trend is still bullish, however we are in a small bull rally. The unique thing about this candle is that it has no top or bottom wick which may change as the month continues.

Based on the candles alone I would be inclined to say the bearish trend will gain strength. However, my Red Pill indicator is telling me price action is going up. Since the monthly ranges are wide and a small bull rally might not affect the bearish nature of the candle, the fibonacci retracement percentages should be considered and used as a guide.

One must also consider the year to date trend. Looking at the 2022 August to November candles shows a similar pattern. Not to say that history will repeat itself, but the past can at times be a guide for the future. In 2022 the bully rally was set off with the green X between October and November, and continued for 9 months. That means buying ATM calls in November would have been very, very, very profitable. That is the good news. 

The bad news is that without a green X or the yellow line making it's way under the close, the bear trend shall continue. The first three weeks of November should let us know if history will repeat itself. As of today, I think we have a 25 percent chance of seeing a green X, but we must also consider the possible government shutdown that may happen later this month.

If we avert the shut down, I think the green X appears, if not that green line crossing the close of the candle will turn black again and the bears will resume their party. At this point the possibility of a shut down may keep a definitive bull trend from forming, which means the market may become choppy.

I set an alert for the green X on the monthly chart, so I can enter my positions as soon as possible. Once the monthly candle shows me the way, I plan to try and ride the wave as long as possible. A 9 month bull trend would be great, but I will also be happy with a 3 month, 6 month, or 8 month bull trend. Either way CALLS and PUTS are on deck. 

I hope my analysis helps you see something you did not see, or confirmed what you already saw. As always do your own research and manage your risk.