ES Update

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After the pros swept the close-in stops underneath, and VST support at 1387.50 held yesterday–ES has rallied up to the next S&T short-term partials target at 1416.50.  Almost 30 points from VST support to ST resistance, so not too shabby on the run up from VST support after the gap range filled.

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ES has advanced +5.7% since the confirmed bottom spotter signal on November 16th!

As I was pointing out yesterday, the pattern for a reversal is to set a structural bottom and then to eventually exceed the previous lower high in the bearish sequence.  Just above that last lower high is where the majority of remaining bears will be trailing buy to cover stops.  The pros know that those are guaranteed buyers–so it is a slam dunk for them to reverse the market to drive the price back to where they know that those who borrowed shares to short will be forced to buy to cover that debt.

Now, the question here is whether we get a lower structural high before 1431.75–or if the pros continue to drive directly to that range top to trigger the stops.  ES 1416.50 to 1421.50 represents the best likely place to get a turn back down if the plan is to set a lower short-term structural high (than 1431.75) and that is why Stops and Targets is pointing out a partials sell at 1416.50 and showing the possibility of a counter-trend trade for those so inclined.

You just have to love those confirmed spotter signals with heavy Russell 3000 confirmation.

…my .02

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