ES Update

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At the close yesterday, Stops and Targets generated a huge number of new bottom spotter signals in the Signals Matrix.

I would encourage anyone new to reading my commentary to carefully read the user guide explanation about spotter signals at the following link:

http://www.stopsandtargets.com/members/help.html#64

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Spotter are always counter-trend when generated and though they have a very good record of detecting major turns once confirmed, there are two parts to a signal… detection, and then confirmation. Sometimes spotters will trigger but not confirm in a sequence, and they are most susceptible of generating a false alarm at the beginning of a strong macro trend.

Just for perspective, I have shown an area currently of great interest to many in the chart just above, and that is a representation of how bottom spotters looked at the late 2007 top.  Red up arrows are spotter signals that did not confirm, blue up arrows are spotters that confirmed but then failed to make the initial objective, which is always the closest primary trend line, and green arrows are spotters that confirmed and then met/exceeded initial targets.

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For ES, the most important number is 1230.25.   That is yesterday’s low, and just one tick below will negate the spotter signal.  That is the current intraday bull/bear line.

As I mentioned yesterday, the present fight is over control of the long-term primary trend line at 1246.   All downside support structures have been broken and all eyes are on the March 2011 low, which stopped yesterday’s down draft as shorts covered on the stop run.

Nearest VST support and resistance is at 1235 and 1264 respectively.  A break of 1230 targets the open gap at 1216.50, with next target lower being at 1206 area.  A break above 1264 targets the nearest primary trend line currently at 1300 area.

…my .02