ES Update

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The market continues to go sideways here…

The consolidation since December’s ‘bonus rally’ has now produced a short-term trading range embedded inside of an intermediate trading range–with a constricting triangle between those pivot highs and lows.

The market ‘feels’ terribly bearish–but technically the bulls are winning this fight above 1970.25

Eventually we are going to get a breakout of this contracting range but for now patience is key.

This type of contracting range tends to draw in the protective stops–and the bulk of those stops are now sitting just outside of the IT and ST pivots with bear stops just above 2062.50 and 2088.75 and bull stops just under 1970.25 and 1961.50

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The paradigm since 2009 has been to constantly build higher pivot lows on the weekly chart.  The last higher pivot low was set at 1961.50 and as I have been pointing out–that is really the key line in play here.  Until/unless a last higher weekly pivot low is taken out to the downside and held–the game continues on.

The market could just as easily dip down as up from here and if 1961.50 were to be taken out–that would become the new bull/bear line with a watch on for the usual telltale stop sweep/reversal play that has followed the last five occurances.

Kinda boring lately, I know, but these are the type of markets that can really hurt traders who lose track of the bigger picture.

Patience

…my .02

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