ES Update

Screen Shot 2016-02-23 at 10.12.18 AM

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The daily bar/range chart above shows that ES has achieved the ST counter-trend target of 1940, which is where the Stops & Targets ST primary trend line is currently located.  This is a key resistance area and would be a prime reloading spot for bears who speculate that the market is headed lower in the short-term.  If resistance at 1940 holds, the next target to the downside would be the breakaway gap at 1858.25

If, however, resistance at 1940 is taken out to the upside–then the ST trend will flip to bullish and the next target higher would be 1983.25, which was the bottom of the old bullish ST range that was broken on January 7th (following a Stops & Targets ST primary trend sell signal at 2004 on January 6th).

So, it’s all about ES 1940 in the coming days to see whether the bears can reassert from resistance in this area–or if the bulls can flip the ST trend back to bullish with a push up and through 1940.

…my .02

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ES Update

Screen Shot 2016-02-15 at 9.33.58 AM

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In my last post I pointed out the technical setup from the double bottom at the lower rail of the LT/IT bearish trident channel…

So far, that stop sweep/reversal setup under the old ST range bottom at 1804.25 at the lower rail is working out nicely.  As a matter of fact, that recent double bottom maneuver was actually a double stop sweep/reversal under both the ST and LT range bottom stops.

This morning the cash market opens with a gap and run in the futures that has popped the bear’s trailing stops above the ST trendline resistance.  The pros knew they could find buyers there (bears buying to cover short positions) and so that’s the reason for the overnight push.

Gaps show intent, and we have two open gaps in ES…the bearish gap at 1931.25 (for the run down to the recent low at 1802.50) and today’s bullish gap at 1858.25 (for the run to raid the stops above ST trendline resistance).  Those two gaps could define the trading range in the near-term.

The ST primary trend line from Stops and Targets recently moved lower, down to 1940, to follow the bearish market action and lock in minimum profits for those gaming the short side.  That is the line that would need to be taken out to flip the ST trend back to bullish.  Likewise for the VST.

Typically when the ST trading range is this wide, the pros will first build a lower high, pull back, and then eventually break through that new lower high to flip the trend–but if the pros have enough bears trapped and on the run we could see a squeeze develop without a pullback for the bears to escape.  As always, this is a game of pressure and intimidation by the pros.

Let’s see how the trading goes following the raid of the bear stops above the now broken trendline resistance. The pros have their initial target in hand at the open but we will need to see if more buyers come in once the initial covering bears have been digested.

Next target higher is the open gap at 1931.25.  Next target lower, if the squeeze fizzles and/or a lower short term pivot eventually gets built, would be the open gap at 1858.25.

The most recent technical buy signal (see Stops and Targets) was a ST and IT counter-trend buy at 1853.25, which is within the ideal entry zone for the LT timeframe (between 1814 and 1886.25).

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Screen Shot 2016-02-15 at 9.57.35 AM

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To help fine tune things a bit, the hourly bar chart shows VST/ST support and resistance.  First VST support for the trendline breakout is at 1877.75.  Next target lower is the open gap at 1860 area and then the last countertrend buy signal at 1853.25.  Next targets above are minor resistance at 1904.25 and then the bottom of the ST bearish ideal entry zone between 1918.25 to 1940

…my .02

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ES Update

Here’s the premarket headline…

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Screen Shot 2016-02-11 at 9.29.57 AM

(click on any image to expand to full size)

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…and here’s the technical setup from Stops and Targets

Screen Shot 2016-02-11 at 10.00.04 AM

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Note that the long-term timeframe is currently ‘in play’ and that we are getting a test of that long-term support this morning along with signals in all three timeframes.

The IT and ST timeframes are counter-trend buy-to-cover signals and the LT timeframe is a buy signal –so long as price stays above the long-term primary trend line.

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So let’s see how all that lines up with my charts…

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Screen Shot 2016-02-11 at 10.04.29 AM

(click image to enlarge)

The premarket dip under 1804.25 to 1802.50 took out the provisional 4 bar weekly pivot at that line–so now we have a situation where the paradigm in play since 2009 is undergoing a major test.  Remember the rules I have been harping on about the weekly bar roadmap all these past several years…  We will know when the paradigm has finally ended when we get a break of the last higher pivot low, which in the current case was at 1853.25, that is not immediately reversed.  If they don’t save this here then we might finally have a situation where the seven year old paradigm is changing.

I have been pointing out that the current structure we are in resembles a wave 4 type of pullback.  The last time we had a major pullback that was not bought after a stop sweep of a previous pivot was at point 2.  What we are looking for here is perhaps an echo or near facsimile of what happened at point 3 whereby we got an eventual double-bottom stop sweep/reversal to continue the paradigm.

Note also the shallow bearish channel (marked by descending parallel red lines).  This morning we got a second touch of the bottom of that channel.  I know this pullback feels absolutely horrible to anyone hanging on to long-term positions–but that current channel angle down is about as shallow as it can technically be to engender the sort of intense fear that they are looking for to reset the paradigm–if, that is indeed the pro’s plan.  If they choose to break that shallow channel–then maybe something more bearish is afoot than what I have been thinking up to now.  If the morning lows do not hold today and in the coming days then the most likely next target lower is the rising VLT support trendline.

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Screen Shot 2016-02-11 at 10.13.11 AM

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Zooming in to the daily bar/range chart…

You can see the dashed-red bottom rail of the trident channel better in the screenshot image above.  The early low was a perfect touch on that line.

So, it’s pretty simple here–if we get a breakdown under the old provisional low at 1804.25 and today’s premarket low of 1802.50 and the bottom rail of the channel is broken –then the market will turn bearish in all three timeframes.

If, on the other hand, the pros have cleverly coordinated this stage show to generate a double-bottom in the midst of the panicky headlines above, then you will know exactly what is going on here.

Professional bears are now pressing trailing stops just above the descending red ST trendline resistance.  If we were to get a rally that breaks above that line, then those bears will start to cover.  Otherwise, that line, currently near 1875 area, can work for IT/ST bears to set buy-to-cover stops who are looking for a breakdown of LT support.

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Screen Shot 2016-02-11 at 10.41.11 AM

…and speaking of gold (from the headline above), it sure has been rocking since the bottom spotter signal at 1045.70 on December 3rd.

The pros sure do know how to put on a show, don’t they?

…my .02

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ES Update

Screen Shot 2016-02-08 at 10.03.31 AM

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The daily bar range chart above shows where we are at technically in 4 timeframes.  Each colored rectangle represents a current trading range.

This morning, the VST (very short term range) was broken to the downside in what could be either the last pullback near the bottom of the LT time frame before the calvary arrives–or something more ominous if we get an eventual failure of the critical 1804.25 bull/bear line.

What the pros often like to do in this scenario is to pull back to the bottom rail of a trident channel to shake loose the last of the dip buyers before they themselves…buy the dip, of course.  That major trident channel is shown on the chart above as parallel dashed green lines drawn off the IT range top at 2102.50 and the current bull/bear line I have pointed out at 1804.25.  The rising bottom rail is currently near the 1828 area.  The day’s early low, as I type, is created by a bounce off LT trendline support.  The key number to watch if that trendline is broken would be the hidden trident channel bottom near 1828.  If it is going to bounce, that would seem to be a good spot.

Of course, it is ultimately all about 1804.25 in the big picture.  If that number fails to hold then the next target lower would be VLT (very long-term) trendline support currently near 1715.

So, head’s up today first at LT trendline at the current low of 1833.25 and then at the 1828 trident channel bottom rail.

…my .02

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