ES Update

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Stops and Targets trading range expansion… now 1123.50 to 1211.75

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Stops and Targets’ trading range of 1123.50-1211.75 now closely matches my recent range of 1123.50-1214.50.  That is the post-FOMC range and 1123.50 is the key bull/bear line where a squeeze remains on from the bull stop run under that line down to 1102, which has now formed a new lower low in the pivot sequence.  The bears who shorted the bear flag break between 1123.50 and 1102 are the ones captured in the present squeeze.  If they come unlocked with a move under that range–there will not be any more guaranteed buyers–and the trap door under the spotter low at 1071 would be targeted next, so it is a good idea to keep that in mind if/when 1123.50 fails.  That is literally the dividing line where a long-term bear market would be unleashed.  In the meantime, the trading range is neutral territory where anyone is fair game, and so traders should be extremely cautious and flexible on bias (in my opinion).

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The initial squeeze target at 1182 I pointed out recently was indeed the place where the momentum faded as counter-trend traders took profits as many ‘late-to-the-party’ bears were squeezed out of post-FOMC positions just before the selling at 1180-1190 began.  As I pointed out yesterday, the dark gray descending trend line is the line to watch for bears short from 1180-1190 area.  Many pros will use that line as a protective trailing stop guide–and if broken to the upside, they will start covering as 1190 would become the next target.  This remains a trading range > 1123.50 and so volatility is expected and bears need to watch out for bear market rallies (especially near the range bottom), which can be spectacular when they erupt.

…my .02

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ES Update

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The big picture remains the same…

ES is currently stuck in a larger sideways range between 1123.50 and 1214.50. There is a continuing short squeeze from the post-FOMC stop run under 1123.50/1105 (shaded purple zone on chart above), and the upside target would eventually be the bear stops located above 1214.50, if that squeeze gets a second wind after hitting the 1182 VST target.

Bears have a potential lower high / lower low sequence building above 1102, but the bottom line here is that they really need to push (and hold) below 1123.50 to seize trending momentum again–and so that remains the bull/bear line.

Price can easily bounce back and forth inside this range seeking stop-running targets, and that means volatility that can drive shorter term players nuts.

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VST bears have a pullback going under the descending gray VST trendline, which currently lines up with 1182 resistance. Under that gray trendline and VST bears are okay–but a move back above that protective trailing stop line could start short-covering from those who guessed at a top between 1182-1190.

…my .02

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ES Update

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Trading range between 1152.25 to 1211.75

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As I pointed out yesterday, 1182 area was a target for the post-FOMC squeeze, and so basically anyone who shorted into the FOMC meeting and failed to cover at the downside targets was squeezed back to their stops yesterday on this counter-trend push up from the partials/countertrend buy target at 1105.50

Now ES is back into a volatility zone midway between the two post-FOMC stop-running targets (1223.50 and 1214.50).  (1224 was the original upside target, but ES has since built a lower structural high at 1214.50)

My VST read generally agrees with S&T’s trading range in that under the 1155 area (which lines up with S&T’s 1152.25) bears would be unlocked from the squeeze into the 9/21 FOMC bar range (1155-1203.75) and we could get downside acceleration if that happens, whereas a move above yesterday’s high at 1190 could next target 1214.50 (which lines up with S&T’s 1211.75) for a double stop sweep after FOMC.

…my .02

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ES Update

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ES has now rallied from an initial ‘cover short partials’ target, generated at 1105.50 on 9/23, all the way back above the ST primary trend line at 1172–and is now back inside a trading range between 1152.25 and 1211.75

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The daily bar chart above points out the big picture of what I think is/has been going on centered around the expected ‘assault on our sensibilities’ FOMC setup…

On 9/21 we got the FOMC announcement and I speculated at the time that I thought the next move would be either towards 1224 or 1123.50 to set up a stop sweep/reversal.   The pros chose to run the bull stops under 1123.50 down to 1105.50 and then we got the reversal into the intense selling, which is what pros need to exit shorts on the sly and accumulate counter-trend long positions without running the market against themselves.   Now we are seeing a squeeze of the bears who missed the original FOMC entry at 1182 and then chased it down into the trap under 1123.50 without taking the partials exits at 1105, 1117, 1123.50, and at 1152.

I pointed out that 1123.50 was the bull/bear line and that a squeeze was likely above that line. As I type, ES is approaching the key resistance line of 1182, which is where the first technical sell occurred on 9/21.  It will be interesting to see what happens here near that line.

The VST bull/bear line continues to be 1123.50, with bulls in control of momentum above and bears would resume control below.

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ES 1182 is key early in the session. Once the late-to-the-party shorts who chased below that initial entry line are squeezed out, we’ll have to watch and see if there is additional buying power above to make a run towards the next resistance band, which is at 1201-1214.50, or if we see selling resume once the guaranteed buyers (shorts covering) have been harvested.

…my .02

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ES Update

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Trending below 1152.25. Countertrend rally back to ideal sell zone.

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In my last post I pointed out the post-FOMC stop run target under 1105.50 and speculated that a counter-trend rally from there could be targeted at squeezing late-to-the-party bears back to the 1152 area who missed the last short entry at 1182 and the partials exit at 1105 from that VST leg. This morning ES has rallied back within the Stops and Targets ST ideal sell zone (1143.50 – 1152.25) for a nice 45 point move from that last downside target.

1123.50 remains the bull/bear line for higher timeframes. Bears would be back in control under that number… the post-FOMC move squeeze continues above.

…my .02

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