ES Update

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ES closed the previous session below the spotter sell signal at 1406, so we now have a confirmed top spotter in play under that line.

The initial target for confirmed spotters is always the closest primary trend line.  In this case that would be ST, presently at 1384

ES 1380.50 continues to be the real line in play here, however.  It is already a VST structural pivot and we’ll see if it is defended in the coming days to create a ST pivot.  That is the next line bears will need to break through and hold if this pullback is to morph into something more bearish.

…my .02

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Along with the confirmed spotter signal under 1406–Stops and Targets shows a short-term countertrend sell at 1399 targeting 1384.

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ES Update

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As expected, the bear stops above 1408 were run with a present high at 1419.75 setting up a tentative top spotter signal, which would only be confirmed on a daily bar close below 1406 (dashed purple line on chart above).

ES 1380.50 remains the key line in play.  VST support has now been redrawn there and bulls are fine on any pullback above that line as we wait to see if a new structural pivot will form for the ST, as well.

The classical definition of a trending bull market is a series of higher highs and higher lows–and bears would need to first cross and hold below 1380.50 to flip the first trend (VST).

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The daily bar chart above shows current trading ranges for four timeframes ranging from the lightest shading for LT to the brightest shading for VST.  The stop run above 1408 will eventually extend the VST range top to at least 1419.75, with 1380.50 being the range bottom.  ST is presently trending > 1371.50

…my .02

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ES Update

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The pullback from 1408 tagged the support target I mentioned in my previous post at 1380.75 (actual low was 1380.50) and that satisfied the minimum pullback criteria to set up a potential ST structural (higher) low.  As I type, ES is pushing higher from that target and has taken out the trailing stop trend line resistance for aggressive bears at 1401.  The initial target for a continued push higher are the bear stops above 1408.

If a new breakout above 1408 occurs, we could see a fast move up.  Next targets are at 1410 and then 1421.  There is then little resistance above until the VLT (very long-term) trend line resistance I mentioned previously near 1435.  If a fast move comes on a breakout–that might do it for demoralizing the bears who have been ‘holding and hoping’ –and lead to the capitulation I have been looking for since the New Year squeeze started.

ES 1380.50 now becomes a very important number over the coming days.  If that low holds, it will redraw the range bottoms for the VST and ST and reset trend line support to the new higher low.  (I have drawn in a tentative dashed gray trend line to show where that new support would be)

If that support at 1380.50 fails, however, the structural support scenario would be reset.

The two numbers in play here are 1380.50 and 1408

…my .02

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ES Update

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The VST trading range has expanded to 1332.75 to 1408 as we watch to see whether the present pullback is ultimately VST or ST in nature.

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I pointed out the minor change in character where the light gray trend line was broken at 1400.50.  Yesterday we got a back-kiss off of that broken trend line, which set up the lower high that I have marked with a dashed purple trend line.  That is the line that the most aggressive bears will be using as a back-stop during this pullback.

After breaking under 1393, the pullback has already gone far enough to set a VST structural pivot.  To set an eventual ST pivot, ES would need to break below 1384.25 –and there is support just below there at 1380.75

So, bears are driving here under 1393 in the expected pullback from the gap fill at 1404.25 and the Stops and Targets ST partials target at 1399, and we’ll see how low they can go…

…my .02

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ES Update

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With a break under the light gray trend line–we have the first tiny change in character from the past ten trading days that coincides with the 1399 ST target from Stops and Targets and the gap fill at 1404.25…

To set a new VST structural (higher) low, ES needs to trade below 1393, and to set a new ST (higher) low ES would need to trade back to the ST primary trend line area, presently at 1368.

The squeeze remains in effect above those two numbers and especially above 1371.50, which is the top of the old VST/ST range–but eventually the market is going to need to pull back.

Although long-suffering bears have certainly been taking a beating–I am not convinced that final capitulation has occurred, which means that any VST/ST pullback from this area could be followed by new highs.

There could also be a number of spotter signals that don’t confirm before we finally get a tradable top.  When that top comes, I would expect to see very large numbers of internal spotters form in the Russell 3000 components, and then confirm.

Until new higher structural pivots form–the present major bull/bear line for the ST and VST remains at 1332.75.  As always, price is the final arbiter and the trend remains up in all timeframes above that line.

…my .02

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