ES Update

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The trident channel yesterday did not hold, and we got another stairstep lower to test countertrend support at 1324, which could be the pro’s downside goal.

On the chart above I have indicated the milestones that countertrend bulls will need to overcome to turn the momentum around.  If last VST support at 1324 holds, the first bullish indication would be a break of (and hold above) the light gray descending trendline at 1334.50.  Next step is to take out the local pivot at 1347.  If that were to happen it would next target the area I mentioned yesterday between 1363.75 and 1370.25 where bear stops since 5/4 are located.

Countertrend trading is a tricky business and it can take one’s eye off the bigger picture, which is the prevailing macro trend.  That said, this push down from 1411.75 is extended and has reached the top of a support void at 1324.  The next VST support lower is way down near the 1295 area, so the pros have probably pushed this as low as they can before triggering a major break –and we could be due for at least a bounce if the goal was to shake out the bullishness.  If, however, this bounce fails–one really doesn’t want to be long under 1320.75.

This may be an area where spotter signals could come into play.

…my .02

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