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Absolutely nothing has changed since the last post and all the commentary there remains valid–especially the part about 1736.50 being the dividing line that would indicate a paradigm shift.  Price would need to cross under that line to flip the first major trend.

Meanwhile, the squeeze since the breakout at 1774.50 continues as the pros continue to dial up the pressure on bears who missed the counter-trend exit at 1736.50

If we were to see a sudden bout of selling develop–the first signal from Stops and Targets would be a short-term counter-trend sell at 1773.25

The VST stops are under 1774.50 and as mentioned before, the ST stops are under 1736.50.  Those are the places where trend followers are pushing up their trailing stops to protect huge accrued profits–and it would take a plunge into those zones to begin triggering those sell orders.  As I mentioned previously, the pros had some inventory to distribute after the last expiration, and I remain patiently vigilant while awaiting the next move from this resistance void at new all-time highs.

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

…my .02

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Okay, that’s what I was looking for…

Now we have a higher structural low in place at 1736.50.  That line now becomes the bull/bear line going forward.  The first primary trend cannot flip until/unless that lines is crossed–so underneath is where the sell stops are now congregating.

Getting kinda frothy now as the bears have been thoroughly demoralized–and remember what I said about that…no significant selling can transpire until the bears capitulate.  The VLT channel structures that I pointed out have been broken, so ES is floating in the ether here with no more immediate upside targets.  As resistance voids go, this is as big as they come.

But finding these tops is always tricky business and requires patience.  The first thing I would expect to see are unanimous spotter signals that confirm (and price must hold below the confirmation line).  The next thing we have to see is a counter-trend sell signal.  And lastly, the big one is the crossing of the first primary trend line, which is the first official paradigm shift.  Until those things start happening, though, all trends remain up > 1736.50 (or 1754.25 for those working in the VST timeframe).

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The hourly chart above shows the pertinent support levels–starting with the breakout at 1773.25 and the rising primary trendline support followed by VST and ST primary trend lines at 1754.25 and 1736.50 respectively.

The right side here is bullish, and has been for short-term traders since that dip into the ideal buy zone at 1736.50–but all the elements are falling in place for a potential exhaustion reversal–so keep those trailing stops snug, and be prepared for a possible coming paradigm shift–just in case.

The first canary in the coal mine would likely be unanimous top spotter signals that get confirmed but those are counter-trend signals that must be confirmed by continuation moves–something we did not get at the last spotter, which only minimally confirmed and then immediately reversed once it hit the ST ideal buy zone.

The pros may have some distribution to do since they likely absorbed a fair amount of called equities at Friday’s expiration–what will be interesting is to see what happens after that distribution concludes.

You’ve heard me say it before…’the trend is your friend–until it ain’t’ and the major trends are definitely bullish > 1736.50

But trend followers should keep a cautious eye out as we hover in the resistance void–to protect those huge accrued profits.

…my .02

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Yesterday’s pop and blast through resistance was a nice surprise for trend followers–but another nasty shock for top-pickers.

As I pointed out in previous posts–there was an excellent stop sweep/reversal setup that retreated to the S&T ideal buy zone.  That was the place to cover and reverse to be properly positioned back with the trend for what came yesterday.

The large VLT/LT trident channel structures have now been taken out–and so what we are seeing here is relief/continuation buying as a new higher range is opened.  I mentioned previously that the only way we will see a significant reversal is when the bears are finally exhausted.  Looks like the pros caught a few leaning yesterday going into November option expiration tomorrow.

As I have been harping on recently–the real number in play now is ES 1736.50.  The short-term range is very extended here and we need to see the formation of a new higher structural low.  The recent pullback to the top of the Stops and Targets short-term ideal buy zone was a perfect setup.  Now we just have to wait and see if that tentative low holds on the next pullback.  Yesterday’s breakout put some daylight between that line and current price–so it is looking more probable.

I have drawn in a preliminary ST trendline support on the daily bar chart above to show where that support will be.  Again, the trajectory is steep and this impressive move from 1640 is extended.

When a reversal comes, we should see first a counter-trend entry in Stops and Targets, and the first possible signal would come on a break below 1773.25.  If 1736.50 forms as a new structural low, then that would become the new ST range bottom and the line bears would need to cross to flip the ST trend.  As I said yesterday, I may be getting ahead of myself–but if I were the one pulling the levers, I think I would form that structural low and then break it with some force if the idea is to sell from a tradable high.

For now, the trend remains your friend as we watch to see if the breakout > 1773.25 / 1774.50 can stick.  Let’s call 1773.25 the new intraday bull/bear line for VST traders.

This is probably not a bad time to reflect on the trend-following gains currently accrued from the latest S&T signals in each time frame:

Long-term = +641.75 (+56.39 %) (on November 28, 2011)
Intermediate = +574.00 (+47.61 %) (at 1,205.75 on December 29, 2011)
Short-term = +118.75 (+7.15 %) (at 1,661.00 on October 10, 2013)

Wow!

🙂

…my .02

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Let’s take a look at the ‘Big Picture’ starting from monthly bars and working back to hourly…

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The lower high/lower low paradigm was officially broken in February of 2018 when the last lower high of the VLT bearish trending sequence at 1502.25 was topped.  That led to a breakout run to challenge the previous all-time high at 1678.50 and that too fell in July.  The next higher target became the top of the VLT trident channel–which as I mentioned many times, has been my ultimate target since the bottom spotter low at 566 confirmed.

We are ‘there’, and have been–now going into the second monthly bar.  This is a point of resolution and where the very biggest of the big fish have come out to play.  There must be resolution to the simple question of ‘is that it?’, and so we see this current sideways action as nervous investors look for a breakout from this potential topping/continuation buy zone.

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The weekly bar chart above shows the minor breakout above the parallel channel top that represents the LT trending setup.  That parallel channel top roughly aligns with the VLT setup–so this area has the undivided attention of nearly all professional long-term and very-long-term players.  If the pros decide to continue the push up and into uncharted territory, that light gray channel shows the next steeper trident channel.  So, the question here is the same; ‘was that it for the LT for now–or is there more upside to come?’.

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Moving in to the daily bar and range chart gives perhaps the best current perspective…

The short-term range is quite extended and we will probably need to see the formation of a higher ST low to bring that range bottom higher.  The recent VST pullback to 1736.50 achieved the minimum pullback for a potential ST structural low–so now we wait to see if that low can withstand the next pullback, which could be imminent if the red descending trident channel holds.

The first real danger for bulls would come on a break below 1736.50.  If that low is defended long enough to become a new higher structural low, that would be the first point of a potential paradigm shift–but I may be getting ahead of myself, so let’s watch to see what happens next.

The two points of most concern on the chart above are the current VST range boundaries of 1774.50 and 1736.50.  A breakout above the range could achieve escape velocity if it appears that the top of those large trident channels from the monthly and weekly charts will not contain the VLT/LT rally.

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…and lastly, we zoom into the hourly bar chart to see what is happening in the very short term.

As I pointed out recently, we got the stop/sweep reversal play at 1773.25 followed by a quick shot down to take out the stops underneath 1747.  That double stop sweep served to enlarge the VST range as we all await resolution of the consolidation around the magenta VLT trident channel top rail.  In a bearish setup, that descending red trident channel is often a great place for a counter-trend entry–but there are always big risks going against a powerful trend on the edge of a potential breakout!

So, the tension continues to build on the uncertainty–and that is what sets up great trades.

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As I also pointed out in my last posts, we got a great counter-trend setup from the touch of ST resistance on Stops and Targets that coincided with the VST setup from my hourly bar work.  That yielded a nice little counter-trend swoop back down to the shaded green ‘ideal entry zone’ on the S&T short-term chart.  Now, the primary trend is re-joined as we await the possible re-test of that simple resistance at 1773.25.

If we get the eventual formation of a higher short-term low at 1736.50 the range will narrow and that would become the new primary trend line.

As for S&T counter-trend entries; if the current rally fails–the first ST counter-trend sell setup would come on a break below minor support of 1726.75

So, now we watch and wait to see what comes next at this extremely important juncture of resistance across multiple time frames.

The trend is your friend until it ain’t, and for now all trends remain up > 1736.50, which may become a very important number in the upcoming days.

…my .02

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The VST stop sweep/reversal setup I pointed out yesterday worked out quite nicely.  🙂

I mentioned that the two sides of the old VST range were in play–and after the bear stops above 1773.25 were swept, the pros wasted no time in reversing and going for the bull stops on the other side of the range under 1747.

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Yesterday, I also posted a screenshot of Stops and Targets showing the resistance target at 1773.25 had been tagged, which was a partials sell.  The initial downside target for that ST pullback was a re-entry inside the ideal buy zone between 1726.75 and 1738.  As you can see on the screenshot above, this morning’s low was inside that ideal buy zone–and so after covering the VST short trade, the game continues back on the long side to rejoin the ST trend.

The stops have been swept under 1747, so let’s watch and see if the long side regains traction on the bounce out of the idea entry zone.  If we see renewed weakness, the first ST counter-trend sell signal would come on a break and hold under 1726.75.  Otherwise, we could see a rally back up to possibly test the new trident top channel line drawn off yesterday’s high.  Intraday bull/bear line is at 1747

…and that’s how ya do it on a quickie counter-trend trade when the VST setup is confirmed by the ST target from S&T

…my .02

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