ES Update

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Screen Shot 2013-11-06 at 9.11.46 AM

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After moving sideways within the VST range of 1747 to 1773.25, ES is nearing the critical decision point for the next move…

The descending bearish trident channel top rail is currently around 1768.50.  Above that channel top is where professional bears are trailing stops from the recent local high at 1773.25

ES is also currently revisiting the VLT trident channel top rail, so we are now getting the pressure on bears and the tension we would expect at the start of the next big move.

If the red trident channel is broken we will see the first buyers come in.  If that channel is broken and price doesn’t immediately retreat, then we could see a breakout to new highs and a continuation of the trap and run game that has been going on since 2009.

On the other hand, this could be the ideal spot to potentially set a counter-trend short trade for pros on a kiss-back to the channel top.  The risk is fairly small for nimble traders of a short entry here–but the caveat is that if the local high (and spotter signal) at 1773.25 is broken, then the setup is invalidated.

So, let’s watch the VST range boundaries at 1773.25 and 1747 very closely for the signs of the next breakout and run.  There is an excellent potential counter-trend bearish entry setup here near the current level just below the red trident top rail–but it would need to be kept on a very tight leash–and 1773.25 is the absolute hard deck for the trade.

If 1773.25 is broken to the upside, it will become the next bull/bear line with the potential for a stop sweep/reversal trade in the opposite direction of the last buy on October 9th.

…my .02

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