ES Update

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Still watching for a bullish capitulation and signs that the pressure is off to the downside.  As expected, 1416.50 held to the downside on the close yesterday (daily low was 1416.75)…but overnight that new range bottom was broken–ensuring yet another lower low in the bearish pullback sequence since the major resistance target at 1467.50 was tagged.

ES 1415.50 is the last VST downside target before a void opening down to the 1398-1402 area.  I like to watch for support/resistance voids as that is where the pros will often push to find the last of the panic stops to raid before reversing.  So, this morning the early line to keep an eye on is 1415.50.  If I were pulling the levers and trying to raid as many stops as possible, this is where I would go before covering and reversing.  However, if ES can’t recover above that last VST support at 1414.50 and rally after the stops are raided–the bears will have won the range breakout and we could see a breakdown as the selling compounds.  As always, it is a game of pressure at the edge of a void.

Interestingly, ES now has pulled back sufficiently to establish a potential IT pivot–and we are also quite close to a back-test of the major VLT trend line breakout (about 1408), so really, this could be a very good spot for a reversal.

We’re into the stops here at the edge of the void–so let’s see what happens next…ES 1416.50 remains the VST/ST bull/bear line with price action bearish below–but would reverse to bullish on a move back above.

…my .02

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