Stops and Targets is indicating a trending market above 1198.50
In this timeframe, there is no significant upside resistance until 1235 area. That can be a double-edged sword, however, as we await indication of whether yesterday’s push through the top of the old range was a true breakout– or ends up being a stop sweep/reversal after the VST bear stops were taken above 1207 (see paragraph below).
The short-term primary trend line (which sets system bias) is located at 1191
In yesterday’s post I pointed out two upside targets at 1198.50 (range top) and the open gap at 1206.50 (now filled) which lined up with a structural pivot at 1206.75. Both targets were achieved, and the VST bear stops were run above 1207 with a daily high of 1210. That number of 1210 is what many day traders will be using as an intraday bull/bear line as they attempt to catch a top from the stop sweep.
I have drawn in a dotted gray descending trendline that many of those day traders will be using for a trailing stop guide. If ES breaks back above that line, odds favor a new local high and the next upside target is VST resistance at 1217 area, followed by 1235.
ES 1198.50 is an important support line for the higher timeframes. If a breakout is going to stick, that line will need to hold and a daily bar close below would be a ST sell as we fall back into a range. The dotted gray trendline I mentioned above should provide an early clue for direction today.
With yesterday’s high at 1210, we have an extension of the bullish higher high/higher low sequence I pointed out previously from the bottom spotter low. ST bulls are technically okay here above the last support buy level at 1111.25, but a move back inside the old range could create confusion amongst many traders who fail to see the difference between a trading range (1111.25 – 1210) and a trending sequence (1077-1111.25 for lows and 1206.75 – 1210 for highs).
Let’s see how today shakes out by watching 1198.50 and the dotted gray trendline, and then we’ll take a fresh look tomorrow at the trend versus range implications.
I have been reading around on trading boards and I have yet to see anyone else who called this recent bottom and subsequent range correctly. We had a gap fill at 1089.50 immediately followed by a bottom spotter at 1077 on 8/9 ,and it has not been bearish since. Yesterday, many of those who missed that 8/9 turn warning and/or attempted to chase the sell-off deep into the hole were squeezed out. Now we have to see if the market returns to a bearish mode once the last of those late-to-the-party bears are cleared out (remember how the multitrend analysis warned of that?)–or if this breakout from the spotter low will stick and target the LT primary trend line next.