ES Update

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Yesterday’s ST/IT counter-trend sell signal at 1254.25 achieved the initial pullback goal of touching the top of the IT ideal buy zone (see how that works) at 1225.25 (shown in first image above) and was a near direct hit to the top of the ST ideal buy zone at 1222.50.  Yesterday’s actual low was 1222.25!

Net gain for that countertrend trade was +33 points and trend following bulls ‘bought the dip’ at the shaded green ideal entry zone (where gain to risk ratio is 3:1 or better)

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Bears remain trapped above the old consolidation range high at 1224 (which also lined up with the bounce at 1222.25).

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I mentioned yesterday that a pullback was expected, and that was a textbook bounce.  Bears have to be careful not to get too greedy on the first selling from a countertrend setup, and it is especially important not to ever let the pros drag you to the wrong side of the market on any trade.

All trends are up > 1215 and we are now watching to see if the present bounce has enough power to challenge the recovery high, or if it stalls short of squeezing the bears again above 1255

…my .02

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