ES Update

.

.

Looks like ES 1148 was indeed the spot!

.

..

.

Yesterday’s analysis pointed out the likelihood of trading within the building ST triangle.  We’ll see what happens when one side or the other of that contracting range is hit.  Next target up is the top of the descending bearish trend channel, which is currently at about 1248

…my .02

.

.

ES Update

.

.

ES has now worked it’s way back up to the resistance band from the 1148 target.  (That is a 120 point round trip from the original 1208.50 VST sell)

The low at 1147.50 continues to be the VST bull/bear line as we watch to see if it will hold on a pullback from resistance long enough to set a new structural low.

Bears continue to have the upper hand below 1208.50, but a move back above that line (and above the resistance band) would begin to trigger bear stops just above the VST trend line resistance.

.

.

.

My big picture read on this market continues to be a range-bound IT market…

As I mentioned yesterday, if 1147.50 holds–the most likely outcome (in my opinion) in the near term is a contracting range inside the building ST triangle (which is itself inside of a larger IT triangle).

To makes things easy–one can just concentrate on the dashed green support and dashed red resistance trend lines that form the short term triangle.  If one side or the other is broken–the next target will be the next higher timeframe, which is the closest boundary of the IT triangle.  The S&T primary trend lines will point out the proper bias as this range eventually unwinds into a sustained trend.

…my .02

.

..

ES Update

.

.

The ES target at 1148 (actual low was 1147.50!) is looking good as a potential structural low candidate.  That was a bounce off the bullish trident channel bottom rail –and the target I have been looking for since 1208.50 was broken.  That line at 1147.50 now becomes the VST bull/bear line as we watch to see how high the countertrend bounce will go to eventually set the next objective (should 1147.50 hold over the coming days), which is the next ST structural high.

The top rail of the bearish channel (dashed red) and the bottom rail of the bullish channel (dashed green) are creating a triangle area around the S&T primary trend lines, which are tightly grouped together between 1208-1218 at present.

.

.

.

ES 1147.50 is now the VST bull/bear line, with momentum being counter-trend bullish above–but flipping back to bearish below.  Next VST upside resistance target is at 1192.50, and if that can be overcome the next major resistance band is between 1208.50 and 1218–which encompasses the S&T primary trend lines and also lines up with the descending VST resistance trend line.

Bottom line here is that 1147.50 will need to hold to set a lower low in a bearish trending sequence.  The rally from that line (if it holds) will eventually set the next structural high.  As I have been pointing out–we have two equally valid trend channels in play and until one or the other is broken, the most likely outcome is a contracting range inside the triangle as momentum builds toward the next trending push.

…my .02

.

.

ES Update

.

.

.

.

ES has achieved the VST downside target (trident channel bottom pointed out in this post) at 1148 (from 1208.50 for about 60 points on the bearish side).

Now we watch to see if a counter-trend rally can start near this area.  If 1148 doesn’t hold (dashed green channel has already been broken), the next VST target lower is a parallel channel rail (purple line on charts above) drawn off the 8/31 to 10/27 highs, presently located at about 1129.  If 1148 or 1129 area doesn’t generate a bounce, the next target lower is S&T’s 1086.25

Markets close early today at 1pm New York time (1:15pm for CME).

All S&T trends remain down < 1208.50

…my .02

.

.

ES Update

.

.

I mentioned in my November 18th post that a break below 1208.50 could target the rising dashed green trend channel bottom.  There is also a second potential trend channel that I have drawn in teal.  (Those two channel rails along with an open gap target at 1155 are also shown in the hourly bar chart below)

Just to review my analysis shown in the chart above… there was a true bearish breakdown that initially bottomed at 1071 (detected by a bottom spotter) followed by a long consolidation where bears shorted heavily.  A double bottom was set at 1068 (again detected by a bottom spotter) followed by a tremendous squeeze back through the consolidation zone and into a second distribution zone (bright yellow rectangle).  The pros got bearish capitulation at 1289.25 and continued to shake the trees above the top of the original range at 1224+ until buyers evaporated (bears stopped covering).  The break below 1208.50 was accomplished by an opening gap which trapped the late to the party bulls who entered an extended rally above that line.  The present bearish thrust is designed to force selling–to create the other side for optimum buying (to cover shorts established from 1224-1289).  Once sellers evaporate, we could see a bear market rally–but the trick is to find the spots where pros might try to set a technical line to again entice buyers once they have finished covering and are ready to run back in the other direction.

The bears are in full control under 1208.50, and we’ll have to watch and see where this move goes–and whether it bounces near the bottom of the trend channels or slices through to set a lower target at IT trend line support (which lines up with Stops and Targets’ next IT target lower at 1086) or the bottom of the dashed red channel.

.

.

.

The chart above shows the next three bearish targets below… at approximately 1163, 1155, and 1148.  VST bears are fine under 1208.50 as we await the building of a minor high to anchor the next descending VST trend line and the stop/reversal line that will ultimately mark a change in character.

.

.

.

S&T shows a fully bearish market under 1216.50 and the intermediate timeframe is in play.  If the trend channel rails fail to elicit a bounce, the next S&T target lower is near IT trend line support.

…my .02

.

.