S&P 500 Futures Update

ES Daily/Range
ES Daily/Range

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ES Hourly
ES Hourly

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For fractal fans, there is an interesting one currently in place in the S&P 500 futures…

The Daily Bar/Range chart (top above) shows the Trump Trident Channel that has been defining the action since the US Election in November.  As I have pointed out previously, the period from the November bottom until April shows price support on the centerline of that trident channel.  Since April, the centerline has been acting as resistance.

We see a similar echo of that trident channel on the hourly bar chart in the current very short-term channel that has been directing the squeeze up from the stop sweep/reversal under short-term support at 2412.50.  Initially, the centerline acted as support from 7/7 to 7/18, but since then the centerline has better defined resistance.  This morning we are seeing a test of the bottom rail of that VST trident channel.

Initially we should see buyers at the bottom of the channel, but f the VST channel breaks, the first VST support is at 2461.25, followed by the old short-term range top (now confirmed support) at 2451.50.  If the pros decide to retrace the entire move since the trendline resistance breakout (the second layer of bear stops pointed out previously) then 2437 could be a good target to the downside.  Otherwise, if a bounce sticks then we could reasonably expect a trip back up to perhaps test the underside of the VST trident channel’s centerline (echoing the bigger Trump Trident channel behavior).

Nothing much else of interest going on right now as all trends remain up above the current VST range bottom at 2405.25.  Price is extended here, so an eventual pullback to ultimately raise the range bottoms would be reasonable.  The minimum pullback to raise the VST range bottom is 2457.50 and it would take a big move down to 2441.75 today (rising to 2447.75 on Monday and Tuesday) to eventually achieve a minimum ST higher pivot low.

So, Cliff’s Note version is this: technically, it’s all good here for bulls > 2405.25 (current VST range bottom) …but the market could be susceptible to a quick downside corrective move under the right conditions.  For traders who have been riding the pop from the ST stop sweep/reversal under 2412.50, let’s use the VST confirmed support line at 2461.25 as a bull/bear line today.  That is where the first VST counter-trend sell would trigger and we could see sellers emerge if that line fails to hold.  If that were to happen, the first ST counter-trend sell would come under 2451.50.

If the pros head back up to continue the bear squeeze after this little dip to the bottom of the VST channel–then the next target higher would likely be the centerline of the Trump Trident channel for another wash-rinse-repeat cycle until the post-election Trump Trident channel paradigm changes.

…my .02

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