(click images to enlarge)
Yesterday’s selling broke ST trendline support at 1307 and has pushed ES to a test of the bottom of Stops and Targets’ trading range at 1300.50
Just below this area is VST confirmed support at 1291.25. That is the line bears must now cross and hold to seize momentum by triggering sellers under 1291. Otherwise, above 1300.50 and we are back inside the trading range.
The early battle today could be in a narrow range defined by 1307 on top and 1291 on the bottom. Above 1307 and the most aggressive bears will start to cover to get out of the way of a possible intra-range rally which could initially target the open gap at 1341.75, and then the other side of the S&T trading range at 1351.75
The next target lower is the stop area under 1291. If ES is pushed under that line, it would trigger protective stops and provide sellers in volume. That is a climate where either a stop/sweep reversal could form (centered around 1291)– or we could see a clean break of VST confirmed support followed by a fast move towards the next bearish objective near 1264.
For now, 1307 can provide a VST bull/bear line… intraday price action is bearish below/bullish above.
The pros love to set up these ambush zones around a contrived ‘financial crisis’. As always, it is best to ignore the news and noise and focus on the support and resistance as the carefully choreographed stage show plays out.