ES Update

.

(click image to enlarge chart)

.

The latest range trade from the (tentative) trendline at 1296.25 I pointed out yesterday is working, so far.  As I type, ES is at the exact midpoint of the 1343 to 1292.50 trading range:

(1292.50 + 1343) / 2 = 1317.75

The dashed red trendline I drew in at the start of the recent pullback is now within striking range.  If that line is taken out, the initial bearish trident setup from 1334 will have failed, and professional bears will likely start cover-buying to take profits.

The trading range (shown as shaded yellow area between 1343 and 1292.50 on the chart above) wiggles may be contained within the triangle formed by dark gray VST support and resistance trendlines.  The action inside that triangle is meaningless from a trending perspective—but those trendlines define the present trading constraints for range traders.  Once price eventually moves outside of that contracting triangle, we could get a squeeze move to break the range and run the stops at either (or possibly both) ends.

As I explained yesterday…if a pullback were to break below 1292.50, we could see the selling floodgates open.  Bears had a shot yesterday, but buyers came in at the trendline to make a goal line stand–and are now driving past the 50 yard line (1317.75) towards the bear’s end zone (to use an American football analogy).  If this were to ultimately rally through the two layers of trendline resistance above—the pros might decide to push the bears to capitulation by exceeding the recent high at 1343.

For now, the dark gray triangle defines the probable VST (very short term) action–and nimble range trading specialists are currently on the fourth leg within that range.

Stops and Targets’ ST primary trend is up >1311.25, with a ST trading range indicated between 1271.50 and 1342.50

…my .02