Quick Friday afternoon update on the current range chart setup…
The ST and intermediate trends turned down at a break of old range support at 2046.50 and 2034.25 respectively. Those lines now become resistance.
When those lines broke, I pointed out the start of the void at 1946.25 and the downside target at 1860.25. The actual low on an overshoot was 1831 and that is now the bottom of a (temporarily) very wide VST range.
We got the expected rally from 1831 back to 1946.25 (twice!) and after a couple of wide range days ES has now broken above that key resistance line at 1946.25. The range chart above shows the wide VST range that was created by the fast move down and then a squeeze back up. Typically, the market will eventually pause long enough to form a VST high and that pullback should determine whether we get a new ST pivot at 1831 in the next few trading days–or if that current low at 1831 will get challenged.
So far, this engineered takedown is behaving similarly to the other ones in the paradigm in place since 2009, but until/unless ES can reclaim the important 2034.50 level, this remains an intermediate-term bearish market and should be traded acordingly.
The band of resistance above is located between 2023 and 2046.50 and the intermediate ideal entry zone between 2003.75 and 2023 is shown on the chart above (and the IT tab screenshot is shown from Stops and Targets). That shaded zone is where we could see some selling come in if today’s high is eventually broken to the upside. If that happens, 1946.25 would again be the first countertrend support target.
Technically, ES 1831 can ultimately work as a long-term takedown low target for the pros if the paradigm continues. That was enough of a scare to shake loose plenty of cheap shares for the pros to both cover and relaod–but as I mentioned earlier, this market is bearish until/unless that band of resistance between 2023 and 2046.50 can be overcome.