ES Update 2

addendum @ 10:30am (New York)

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The breakout of the bearish trident this morning is a big deal, but the implications of a potential reversal of the VLT macro bearish trend is a HUGE deal…

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The macro bearish downtrend channel, intact since 2000, has been broken!

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The VST chart above shows the explosive move I have been expecting, and the next logical target is the resting bear stops above 1424.75.  The next target higher is at 1438.50.

If 1424.75 is exceeded, the spotter signal is voided.

I was wondering how the pros would take advantage of this extremely powerful setup, and the timing of today’s move to coincide with tonight’s speech is deviously opportunistic indeed.

…my .02 x 2

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ES Update

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If it is going to happen for the bears, this is the spot where the push from the range bottom has to hold.  ES has touched the top of the bearish trident channel (magenta trend line on the chart above) drawn from the 1424.75 top spotter high.  You may recall me saying that line is the trailing stop guide for professional counter-trend bears.

So here’s the setup…

The poke down to 1394.50 was the minimum ST structural low I have been looking for.  It was just enough to break the range bottom, and we got a bounce there back to test the magenta trend line resistance this morning.  That low at 1394.50 became the new bull/bear line once we got the reversal back above the old range bottom at 1395.25.

Now the bears are on the ropes here at the magenta line.  If the plan is to take this down, that is possibly the ideal short entry–but, if it breaks out above that channel we could see massive covering begin if it looks to be running toward the range top at 1424.75.

Tonight is President Obama’s big speech and conventional wisdom says that he is logically ‘Chicago’s Boy’, and the Chicago Mercantile Exchange is all set up here to give their guy a big technical breakout present if this bearish setup is reversed and a macro VLT paradigm shift is coming.

So, all of the elements are falling in place for a decent trade here.  There is a scheduled ‘event’, we have a technical pressure point, and the pros have now spent 13 days in the small range consolidating and preparing for their next move.  With the retail players nervously tightening stops, all the elements are here for an explosive move.  As always, the pros haven’t telegraphed their intentions–but rather obfuscated and muddled the view for most.

The premarket high is at 1414, and if that is taken out to the upside and held, we could see covering kick in and if the pros are so inclined, they might have the juice for a big push to make a nice green bar on the chart for their guy.

ES 1394.50 is the VST bull/bear line.  Price action is bullish above but would switch to bearish below.  All eyes are on 1414 in the early trading.

…my .02

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