The pullback from 1408 tagged the support target I mentioned in my previous post at 1380.75 (actual low was 1380.50) and that satisfied the minimum pullback criteria to set up a potential ST structural (higher) low. As I type, ES is pushing higher from that target and has taken out the trailing stop trend line resistance for aggressive bears at 1401. The initial target for a continued push higher are the bear stops above 1408.
If a new breakout above 1408 occurs, we could see a fast move up. Next targets are at 1410 and then 1421. There is then little resistance above until the VLT (very long-term) trend line resistance I mentioned previously near 1435. If a fast move comes on a breakout–that might do it for demoralizing the bears who have been ‘holding and hoping’ –and lead to the capitulation I have been looking for since the New Year squeeze started.
ES 1380.50 now becomes a very important number over the coming days. If that low holds, it will redraw the range bottoms for the VST and ST and reset trend line support to the new higher low. (I have drawn in a tentative dashed gray trend line to show where that new support would be)
If that support at 1380.50 fails, however, the structural support scenario would be reset.
The two numbers in play here are 1380.50 and 1408