ES Update

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Screen Shot 2013-03-28 at 9.32.37 AM

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The setup remains unchanged from my last post… VST traders remain focused on 1558.75, which is the top of the ST range.  We have now had three pokes into the void area above with the next resistance target much higher at 1595.50

There are now nine days worth of bull stops accumulated above the ST support line (and bottom of the ST range) at 1529.50, and the rising IT trendline support is in the same general area.  As I mentioned previously, the breach of VST and ST support trend lines suggests that the downside may not be over from this touch of the void area–and those stops under 1529.50 are low hanging fruit if the pros are looking for some shock and awe from this holiday setup.

That said… all major trends remain up > 1529.50

Globex closes today for the Good Friday holiday at 4:15 pm Chicago time and does not reopen until Sunday night.  The game for the pros recently has been to game big moves over holidays, so we could see something develop.  To my thinking, the bears have been hit pretty hard with the marginal new highs after a prolonged squeeze, so it could be time to pull this back and go after the bulls to set at least a marginal new lower low underneath 1529.50.

As I mentioned before, the key line in play for the most aggressive traders is 1558.75, and that is where we have seen the sellers come in the past four days.  Unfortunately, unless we get a move away from that line–those aggressive traders will be exposed to a potential gap move either way over the holiday break.  That sort of unknown risk direction is what predicates big moves, and we could be setting up for one here.

S&T trend traders have big gains locked in here, with a decent cushion above the trailing stops –and a partial profit target met at 1558.75.  The short-term range between that line and 1529.50 is the realm of the most aggressive counter-trend bears here–but they will be ejected from those speculations on a push above the current local high (and unconfirmed spotter) at 1560.50.

I have to emphasize that any bearish speculation from 1558.75 is counter-trend.  Bears would need to see a break of 1535 to flip the VST trend and then 1529.50 to flip the ST trend.  Above 1558.75 is as bullish as it gets, with trending breakouts in all time frames–so caveat emptor.

…my .02

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ES Update

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.Screen Shot 2013-03-25 at 10.13.39 AM

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The small range between 1529.50 and 1558.75 has now set up the ST triggers I have been waiting on…  If ES holds above 1529.50, that will become the new ST pivot and a higher low in the current sequence as well as the S&T short-term primary trend line.  We also have a higher high set at 1558.75–higher lows and higher highs are, of course, bullish.

As I pointed out in my last post, the breach of support trend lines (VST and ST) suggests potential weakness ahead–even though we have gotten a push up to run the stops above the range top at 1558.75.  That push also invalidated the spotter at the same level.

The new intraday line in play here becomes 1558.75, as traders watch to see if we get weakness after buying ebbs from covering bears.  If that were to happen, it would set up a stop sweep/reversal setup at the edge of the void (up to 1595.50).  Ideally, we would see a set of unanimous spotter signals form across the futures and indexes with massive confirmation from the Russell 3000 when a tradable top comes.  That didn’t happen on the last spotter.

The key here in the short-term is 1558.75.  Above that line continues the trending breakout in all time frames, and it just doesn’t get any more bullish than that.  Below, and we have the possibility of a stop sweep/reversal setup for aggressive counter-trend traders.

Lots of bears around, it seems–and those guys are probably going to have to be demoralized and give up on top-picking against the trend before we can get a sustained pullback–otherwise, it is just too easy for the pros to continue to push to marginal new highs to force covering with little to no resistance above.

ES 1529.50 is the line bears would have to eventually cross to flip the first major trend bearish.  All major trends remain up > that line.

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Screen Shot 2013-03-25 at 10.21.03 AM

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S&T trend followers have huge gains locked in (~35%, 28%, and 5% respectively) , with another ST partials target being hit this morning at 1558.75.

The trend is your friend…until it ain’t.

…my .02

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ES Update

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Screen Shot 2013-03-22 at 8.45.30 AM

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As expected. the pros have parked ES in the VST range I pointed out between 1529.50 and 1558.75.  The idea here is to let the next structural pivot(s) form to set up the triggers for the next move.

In my last post I pointed out that if we were going to get a stall in the push up from the stop run under 1531.50 that it would likely come on a retest of the filled gap at 1552.50 and that is what happened.  I am watching the red bearish VST trident channel on the chart above and we are getting a touch of the top rail as I type.  We got a break in the VST support trendline yesterday, and that increases the possibility of a move lower here–with the trident channel acting as referee.  If we get a sustained move > 1544 that bearish channel will be taken out–otherwise we could see selling come in with the first target being accumulating stops under 1529.50

So, early on here–let’s keep an eye on the 1544 area.  If that minor bearish channel (counter-trend) is invalidated–we likely continue with the VST range-bound action as we wait for the time cycles to catch up to the recent bullish breakout.

All trends remain up > 1525.25

…my .02

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ES Update

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Screen Shot 2013-03-20 at 8.49.14 AM

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Okay, let’s recap the action of the last couple of days…

We got the touch of resistance at 1552.25 on the edge of the resistance void which brought the expected exhaustion pullback.  That initial pullback took out the stops under 1531.50 and set a VST structural low at 1529.50, which is within the ST ideal buy range from Stops and Targets of 1525.25 – 1542.50.  The bounce, after the opening selling abated, went straight to fill the first of two breakaway gaps at 1552.50.  After that fill we got sideways down action back inside the ST ideal buy zone to set a pullback higher low –and so far this morning we have a retest of the gap fill at 1552.50.  If we are going to get a stall on the snap back rally, this is the area where it would be expected.

ES 1529.50 is the new VST bull/bear line as we wait to see how this current upward poke resolves.

We also have a confirmed spotter signal on ES from 1558.75 (confirmation line is at 1549).  Typically, a confirmed spotter will pull back to challenge ST support–so we’ll have to see if this one does that, or if the signal will ultimately be invalidated by a move above 1558.75.

ES is extended unusually far from current ST trend support (currently at 1485.50), so we could see a higher low build, with 1529.50 as the current candidate.

The current range in play here is 1529.50 – 1558.75.  As I mentioned previously, this move is only VST in nature, thus far.  We are watching here to see how the next structural pivots set up.  We would need a few more days under 1558.75 for that to morph from a VST top to a ST top.  Of course, any move above that line would reset the cycle clock (and invalidate the spotter).  If we get a second push down that takes out VST support at 1529.50, then we would start looking for this initial move to morph from VST to ST…but all price action above that line remains bullish across all time frames.

So, let’s keep an eye on the VST range boundaries at 1558.75 and 1529.50.  Odds are, one of those two numbers will become the next ST structural pivot.  Bulls are hoping for 1529.50 to hold to form a ST low–whereas bears would like to see any further rally from here capped below 1558.75 to form a ST top.

Next VST targets higher are the gap retest here at 1552.50 then the remaining breakaway gap at 1557.75 and finally the bear stops resting above the VST high at 1558.75.  Next targets lower are close-in bull stops under 1529.50 and then the ST support band between 1525.25 to 1514.75.  Outside of the VST range–the next higher range parameters are the open gaps at 1557.75 and at 1499.75

…my .02

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ES Update

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Screen Shot 2013-03-18 at 9.21.26 AM

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Just like clockwork, we are getting the expected pullback from the target at 1552.25 and the resistance void above.  For those very aggressive traders who took the trade at the first poke under that line and placed a countertrend stop at the high–the pullback has achieved the initial target, which is a push into the ST ideal entry zone (shown as a shaded rectangle on the chart above) between 1525.25 and 1542.50, and a stop run under 1531.50

The sneak attack overnight is the easiest way to run 9 days of bullish stops without inviting the sort of volume that would otherwise occur intraday.  That is also the pro’s way of shutting out the bears on the initial entry setup that I pointed out in my last post and forcing them to chase the move.

Key support below is the bottom of the current trident channel and then 1525.25, which is ST support.  If those are taken out, we could see another leg of selling, with ST trendline support currently at 1514.75 area as the next target lower, and then the open gap at 1499.75.

If price drifts higher to thwart chasing bears once initial stop loss selling abates, we have two breakaway gaps to fill at 1552.50 and 1557.75

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Screen Shot 2013-03-18 at 9.34.38 AM

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Checking in with Stops and Targets, we see the same support level at 1525.25.  That is the line that bears would need to cross to trigger the first counter-trend sell in the short-term time frame.

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Screen Shot 2013-03-18 at 9.36.46 AM

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That was a nasty opening gap, but the first major trend would not flip until 1477 is crossed, so this pullback is only VST in nature, at this point (below 1551.75).  We are guaranteed to ultimately get a new structural low from this pullback, but we’ll have to wait and see where it sets up.  Minimums have already been met at 1529.50

The VST line in play here is at 1531.50.  That is where the 9 days of stops were run under the March 6th lows.  The ST line is at 1525.25, which is the counter-trend stop for the short-term.

…my .02

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