ES Update

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The range breakout at 1198.50 was a major momentum buy signal for ST traders…  Next upside target is at 1235.   ST trend is up > 1192

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ES has opened above the stops of the bears who shorted yesterday’s high.  The VST resistance band target of 1217 has been exceeded, and so we watch for a continuation to the next ST target at 1235

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The following daily charts lay out the current trend perspective across a range of instruments…

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ES Update

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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

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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.

…my .02

ES Update

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As I mentioned in my last post, the usual game in a trading range is stop-running– and after a poke under 1153 to run the mid-range bull stops, we got a reversal back up through the S&T countertrend buy line at 1159.25, and ES has now attained the short-term primary trend line at 1189.25, which was the initial target of the counter-trend entry from 1159.25 (+30) and an extension of the range trade from 1111.25 (+88).

The top of the S&T trading range is the next target at 1198.50

The S&T system bias is now bullish above 1189.25 and would revert back to bearish below.

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According to S&T, we now have a short-term rally in the context of an intermediate-term bear market.  ‘Bull 6″

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It has taken 14 trading days to get there, but ES has finally achieved the initial confirmed bottom spotter objective from 1077, which is a touch of the closest primary trend line.  That spotter entry is now up > 110 points from detection.

The top of the trading range is just above at 1198.50, and the structural pivot and open gap is next at 1206.75.

…my .02

ES Update

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In yesterday’s post I pointed out that ES was nearing the ‘ideal sell zone’ between 1185.25 and 1194. The actual high yesterday was at 1188.50

As I type, ES is nearly 40 points under that minimum 1185.25 line. ES is now in a lower ideal sell zone below 1159.25 with a cushion (and locked-in profits). See how that works using ideal entry zones for positioning along with strategy clues from the multitrend analysis?

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ES continues to coil tighter within the S&T trading range of 1198.50 and 1111.25 building up energy for an eventual breakout. The center of the trading range is at 1154.88, and price action is bearish below and bullish above that line, which lines up favorably with the S&T bull/bear line at 1159.25 and yesterday’s low at 1153.

The game within a trading range is stop-running and the pros got the bears yesterday near the top and so today in early action we are headed the other direction from that S&T ideal sell zone signal at 1185.25.  The initial bearish objective was the stops under yesterday’s lows at 1153 and that number can serve as an intraday bull/bear line for day traders.

As I mentioned yesterday, it is all about the trading range, and the easiest metric to use in the bull/bear tug-o-war for control is that centerline at 1155 area and/or 1159.25 bull bear line–until one side or the other of the range is crossed for a trending breakout.

…my .02

ES Update

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In a continuation of the range bottom buy signal from 1111.25, S&T triggered a counter-trend buy signal yesterday at 1159.25.   As I type, ES is up >70 points since that range bottom buy signal.  Note that the ideal sell zone is between 1185.25 and 1194

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I wanted to point something out on the multitrend tab…

Stops and Targets guessed that the sell-off to 1077 was probably overdone.  That extension set up a snap-back squeeze to punish shorts who likely missed the original breakaway move and then chased it when extended.

The multitrend strategy suggestion for the best way to play this bearish configuration has been to sell near ST resistance and then let a ST trade morph into a longer term hold.  It remains to be seen if it all plays out that way, but there are subtle but very important clues to be gleaned by carefully reading the entire analysis.

Confirmed spotter signals are powerful indicators, and the initial target is always the nearest primary trend line (currently at 1194).

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The push up from 1111.25 has now taken out both the ST and VST trendline resistance at 1166 and 1172 respectively.  ES is in a trading range between 1111.25 and 1198.50 and the typical behavior inside a trading range is stop-running.   As I pointed out yesterday, this market appears to be coiling within that range and the next trending breakout move could be a big one.

ES is nearing the top of the range and there is resistance just above.   ES 1159 remains the bull/bear line and a move back below would again place all timeframes in a fully-bearish configuration.  If that happens, bears would be looking to eventually push below 1125.25 to break the bullish reversal structure I explained yesterday.

Next upside resistance is the ideal sell zone between 1185.25 and 1194 and then the range top at 1198.50.  An extended move above 1207 would likely take out most bear stops, and would be an extension of the higher low/higher high recovery sequence.

It’s all about the trading range…

…my .02