ES Update

Today is the start of the 2-day FOMC meeting culminating with the announcement tomorrow at 2 pm ET– and after the close today we get the much anticipated Apple earnings.  It’s all set up here for the next move…the question, of course, is ‘which way?’.

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Screen Shot 2015-10-27 at 10.53.24 AM

 

(click on any chart thumbnail to expand to full screen)

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The weekly chart above might help a bit…

If the idea is to go for the bear stops then a push above 2117 would clear out the last bearish holdouts from the July takedown from 2117 to 1851

If, on the other hand, we get something reminiscent of what happened after point 3 on the weekly chart above–we could see a pullback to set a new four bar lower pivot high similar to what happened in November of 2011.  If that pullback were to materialize I would expect the pros to go for the stops under the first weekly bar higher low (at 1937.25) after the last higher 4 bar pivot low.  That’s what they did last time and it set up the last descending trendline (see red trendline on the chart above).  It was the eventual upside breakout of that trendline resistance that set up the last confirmed buy signal (see green arrow after point 3 on the chart above).

*Note that we will get a new higher weekly pivot low at 1861 (point 7 on the chart above) so long as price stays above that line between now and Friday’s close.

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Screen Shot 2015-10-27 at 11.03.53 AM

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It is a tough call here on what comes next… the LT/IT high at 2117 came very close to the monthly bar time/price projection of 2149.25 on 3/16 that has been the ultimate target since the huge VLT trendline breakout (that ended the secular bear market) back in September of 2012.

In a perfect technical world it would be nice to see an eventual breakout above 2117 that would ultimately trigger unanimous spotter signals across the indexes and then be confirmed by the Russell 3000 to give a clean exit for this massive rally leg that started in March of 2009.  If and how it gets there is the unknown, but we have a confluence of two events (Apple and FOMC) that could possibly help to provide a smokescreen for a shove one way or the other by the pros.

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Screen Shot 2015-10-27 at 11.12.29 AM

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Moving in to the daily bar/range chart; the light green ST trident channel that I pointed out previously continues to track the midline of guidance by the pros.  The next daily targets higher are the open gap at 2105.25 and then the buy-to-cover stops above 2117.

Underneath, the first trailing stops for bulls, after the big breakout spike on 10/22, are currently sitting under 2007.50.  It would take a move below that line and a break of the bottom rail of the ST trident channel to kick off significant selling and that correlates nicely with Stops and Target’s ST primary trend line at 2011.75

It’s up until it ain’t, but we have some significant ‘news and noise’ coming–starting with the Apple announcement after the close today–so head’s up.

…my .02

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ES Update

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Escape velocity has been achieved after a breakout through the resistance confluence pointed out in yesterday’s post…

It’s all good for bulls above 2025 with price now trading above the primary trend line in all three timeframes.

The next major target higher is the open breakaway gap at 2105.25, which is where the pros started their engineered takedown on 7/22/2015.

The light green trident channel on the first chart above is what the pros are using to guide the trajectory of this current push, so we’ll keep a watchful eye on the center of that channel and then the lower rail if we get a pullback started before the gap fills at 2105.25

…my .02

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ES Update

Let’s take a look at the Big Picture for ES…

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Screen Shot 2015-10-22 at 9.58.58 AM

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On the monthly bars October has a higher high and higher low than September.  We still have the paradigm goal of 2149.25 on 3/16 (shown as the upper right edge of the cloned time/price rectangle) as the upper target and the VLT trendline support trendline underneath.  It’s all good for bulls here > 2011.75 (September’s high).

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Screen Shot 2015-10-22 at 10.04.35 AM

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On the weekly bars we see another higher high/higher low on the current bar and the hard deck (for a sell) is at 1982.50 (last week’s low).  This chart has served as a paradigm roadmap since 2009 and the most recent buy signal at 1821.75 (and then a probable higher pivot low at 1861) has not disappointed!  Today ES is trying for a breakout of key resistance at 2025.  That is the line where the last confirmed sell signal (breakdown below last higher 4 bar pivot low) was generated.  Note that at the last similar occurrence after buy point 3 on the chart above, ES broke above the last confirmed sell line (to run stops) before retreating long enough (six weeks) to generate a lower high at the descending red trendline.  That is what we are watching for next…

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Screen Shot 2015-10-22 at 10.14.02 AM

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As I mentioned in my last post, ES 2011.75 was indeed an excellent bull/bear line serving initially as resistance and then later as confirmed support for the current run into resistance…

On the daily bar/range chart we can see the strong resistance zone between 2025 and 2047.25 that ES is attempting to chew through right here.  ES 2037.25 was the site of that last confirmed ST sell (next target) and that zone could be extended up to as high as 2047.25 to account for the last confirmed sell at a break below a higher low (both triggered on the same takedown day 8/20).

There is also descending ST trendline resistance (dashed red line on chart above) that correlates with the center tine of the current ST bullish trident channel and the top of a parallel channel of the IT support trendline.  So, head’s up near this area as we watch to see if the pros can jump all this resistance–or if they eventually sell it back like they did back in November of 2011 after point 3 on the weekly chart.

…my .02

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ES Update

Screen Shot 2015-10-09 at 9.51.06 AM

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So far so good…

The pros have been sticking with the same script that has been in play since 2009.  Hopefully everyone got the ST bottom at 1861 that I pointed out in my September 29th post.  🙂

I have pointed out several times that the line at 2011.75 was sufficient for a ST pivot on 9/17 but that it fell short for qualifying as a 4 bar weekly pivot at the time.  The good news is that with this morning’s poke above 2011.75 we are now assured of at least the minimum technical requirements for a new weekly lower pivot high.  So now, ES 2011.75 becomes the new bull/bear line as we watch to see which path the pros take next from here…

I mentioned in my last post that if I were pulling the levers I would poke above 2011.75 to take the stops and establish the minimum weekly pivot (>2011.75) before pulling back for another round of consolidation.  That is one of two possibilities now that 2011.75 has been exceeded…

Above 2011.75 is a band of very heavy resistance between 2025 and 2037.25.  ES 2037.25 was the original ST sell signal generated on August 20th along with the original IT sell signal at 2025 on the same date.

Most bears likely didn’t begin to chase the downside move until after the trendline support was broken at 2016 on 8/21.  That means the pros have likely run most of those bears who missed the turn at 1851/1861 back to a loss at these levels.  As I have said many times before–the pros use pressure to accomplish their goals and a squeeze into the stops is exactly what this move since 1861 has been all about.  So, option one is the pros finish the squeeze somewhere between 2011.75 and 2037.25 before pulling back to set an eventual weekly pivot high, which would mean at least four weeks of trading ahead that would be below the weekly pivot reversal point.

Option two could be some form of the press, gap, and squeeze play to jump heavy resistance at 2025.  In order for the pros to break out above that resistance band it might require a gap up opening to jump 2025 and then a hard jam up and through 2037.25 to get back into a position to ultimately challenge the original breakaway gap at 2105.25 generated on July 21, 2015.  Breakaway gaps show intent from the pros and that is where they kicked off their downside campaign targeting 1851 with a slight overshoot to 1821.75 (it is interesting to me that they left the open gap at 1819.25 intact).

So, with those two possibilities in mind…let’s use 2011.75 as the new bull/bear line.  The pros now have their minimum in place for a potential weekly bar pivot high–so this general area would be a good place to pull back once the stops are swept, if that is indeed the plan.  Above 2011.75 and the resistance band from 2025 to 2037.25 comes into play–but the pros will need to clear and hold 2025 in order to flip all trends back to bullish.

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So, head’s up right here at 2011.75–momentum going forward is bullish above/bearish below.

…my .02

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ES Update

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In my last post I pointed out the high probability buy zone between 1821.75 and 1871 (shown in a hashed rectangle on the chart above) and noted that the next likely upside target would be descending short-term trendline resistance, which is currently near the 1968 area.  That’s where price is as I type.

My thesis has been that the pros intentionally took the market down in mid-August and the buy-to-cover target was at 1851.  We got a small overshoot there and then an accumulation began on a cross back above that line.  The pullback within the shaded blue rectangle that I pointed out in my last post and that had a 75-80% probability of success based on the weekly bar paradigm has worked out nicely here so far.

The approaching trendline resistance is something most everyone can see on their charts and so it becomes a place where we could potentially see some profit-taking.  If that line is taken out to the upside–either directly or after a pullback from a touch–the next target zone higher is the shaded red rectangle between 1996.25 and 2011.25.

You may recall me saying in mid September that 2011.75 would work as a ST pivot but fell short of the parameters necessary for a key weekly pivot.  If I were pulling the levers, I think I would eventually go for the stops just above that ST pivot, establish a new weekly pivot and then pull back again for another round of accumulation before finally heading back up to new highs.  First things first, however, and that is dealing with the trendline resistance here…

So another head’s up right here near 1968 area as the pros continue to build the anticipated structural framework in the aftermath of their engineered takedown to 1821.75

…my .02

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Screen Shot 2015-10-05 at 9.59.01 AM

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PS…

It is also worth noting that we have begun to see large numbers of internal Russell 3000 spotter signals accumulate over the past few trading days.  If  ES 1821.75 ultimately holds, we should see new leaders emerge from that group of stocks, which can be browsed in the following table showing all currently confirmed spotter signals:

https://stopsandtargets.com/members/signals/spotter.php?param=BSbuy

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