The ES came into the target area off of the daily inverted head and shoulders pattern that had triggered in early March. The Dow mini contract is still lagging and so far has failed to reach its target off of its same inverted head and shoulders pattern. The ES formed and triggered a daily market structure high short at 1156 but was still able to close above the daily 5 period moving average (red line).
At the moment, (Sunday evening) the ES has opened well below its daily 5 period. If we close below that area (1156.75) it will be the first close below the daily 5 period in 19 days. This could set up a move back down to the 13s (light blue line) at the 1144.50 area. If we get below that daily 13s then a correction down to 1113 area ( 50 day ma) will be possible.
If the 13s area holds as support then we may get a run up to the high end of the target area at 1172. At this point, we would be looking at more risk than reward to the upside. We have not seen, however, any big volume days in conjunction with a topping pattern so a continued slow grind higher is possible after this current pullback.
The monthly ES is setting up a market structure low which will have a potential long trigger next month and a bearish break down at 1040.50 if the current structure holds. Be on your toes at this point as anything can happen with a vote near on this health care bill.
Recent Comments