Yesterday’s gap and go took out 58 trading day’s worth of bull stops! There is simply no defense against that sort of premarket gap takedown, and the pros have the bulls in a calculated squeeze here–while simultaneously daring the bears who were not counter-trend short ahead of the takedown to initiate short trades deep in the hole.
The pros poked just under IT range support yesterday at 2049.25 and we are watching in the early going to see if that line can hold to set up an IT stop sweep/reversal play.
Yesterday’s low at 2047.25 is the new bull/bear line for today–with the same setup as yesterday (at 2054). Intraday action is bullish above and bearish below that line.
If that provisional low at 2047.25 were to be taken out without a reversal, the next target lower will be 2025.75, which is the current minimum pullback target for a potential higher LT structural low.
The stop ledge I pointed out just under 2023 would be next.
This market has been in desperate need of a reset for some time and once the Russell 3000 rebalancing was over…they yanked the rug–and make no mistake, that move yesterday was entirely premeditated and brilliantly calculated.
In the early action, ES is trading between IT support and ST resistance. Bears would like to see 2061 hold as resistance and 2049.25 support fail, whereas bulls would like to see 2049.25 hold as support and 2061 fail as resistance.
The pros are just watching the order imbalances and pondering their next move.
ES 2047.25 is the line in play…bullish above, bearish below.