ES Update


(click image to enlarge chart)


ES has hit the top of the short-term trend channel (green parallel lines in chart above).

The last of the bear stops remaining from the previous pivot high at 1224.75 have been hit, and so now there is a possible countertrend setup forming from that channel top.

The line at 1224.75 becomes a new VST (very short-term) stop sweep/reversal line for countertrend bears–with the short-term channel top rail (presently at about 1228) serving as a hard protective backstop.  If a countertrend short trade develops, the pullback target would be 1200-1206 initially, then possibly back to 1196 area to retest the trendline breakout near short-term primary trend support.  The VST trade setup makes some sense from a risk/reward ratio perspective…but it is countertrend.

If that short-term channel top is taken out to the upside, the next VST target higher for ES is at 1237.50 area.

Stops and Targets is showing a similar potential countertrend trade setup from 1222 to 1198…but the ‘correct’ trade here is long from 1190 (or better yet, long from the last S&T countertrend buy signal at 1174.25) with partials taken at 1222 and the trailing protective stops for that long trade sitting at 1198 with a minimum of 8 points currently locked in.  The next higher short-term target is near the 1268 area.

All trends are up > 1196