ES Update

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Screen Shot 2013-11-07 at 9.51.11 AM

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ES 1773.25 was taken out to the upside on a news-driven spike–and that invalidates the 10/30 spotter signal.

The last spotter signal from 1773.25 never really got going as can be seen in the chart above by looking at the price action around the dashed purple spotter confirmation line at 1751.75.  After the initial spotter signal was triggered, there were five hourly touches of that line at 1751.75 that were bought–before a poke underneath down to 1747 was reversed.  Then we got a rally with a minor pullback to the line, which was again bought.  The trident channel top was breached on the next rally and that led to the sweep of the stops above 1773.25.  The initial spotter pullback never got deep enough to set up a ST low–so we just had a failure of a (marginally) confirmed spotter signal.

That one’s done, so we start looking for the next setup…

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Screen Shot 2013-11-07 at 10.04.37 AM

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Taking a peek at Stops and Targets–this morning’s pop of a new high represents a test of resistance and the reaching of that ST target.  It is a partials sell to lock in profit in the move from the initial trend buy at 1661 on October 10th, and all major trends remain up > 1661.  That ST support level is quite a ways down, and so this move is likely extended.

I mentioned yesterday that we could see a stop sweep/reversal setup–if a move into the stops above 1773.25 is followed by a reversal sell-off.  In the early trading we are seeing a reversal move down on negative breadth and we’ll see how it goes throughout the rest of the day and especially into the close.  Bears would really like to see a move under 1747 to bring in the first (VST) sellers and to actually start flipping trends.

As I mentioned yesterday–the play is currently at the edges of the old VST range between 1773.25 and 1747.  They got the stops above 1773.25 on the opening gap–so let’s see what happens here on this first pullback.

In the VST, 1773.25 is the new bull/bear line and intraday price action is counter-trend bearish below–but reverts back to bullish above.

The VST primary trend line is currently at 1747, and that is the line that would have to be taken out and held to flip the first trend down.  We are getting the expected stop sweep/reversal pullback from the resistance target at 1773.25 and let’s see what happens when ES reaches the first pullback target at 1754.50

…my .02

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