The Double Top Fulfillment and Temporary Bottom
Friday’s session was just a consolidation for most
of the day then it had a bear train continuation around the close. In the
morning, the bulls tried to break above the 1HR 50SMA but it was immediately
rejected by the bear train once again - similar to Tuesday’s formation. In the
afternoon, ES made it back to overnight lows and it had a standard 1HR 20EMA
bear train setup. When the overnight lows broke decisively, it flooded towards
the 1915 close that we expected from the intraday update. This was an accelerated
1HR 8EMA bear train into the close, this could setup the capitulation bottom
for early next week.
What’s next?
Daily closed at 1913.25, the bear acceleration phase is
doing great and price is entering towards a major support area at the
1892-1900. Remember the 100% measure move from the double top targets 1891.75. The
1915 intermediate target is fulfilled and remaining targets at 1900 and 1891.75
are transitioned into immediate targets.
This is a bear train
until price proves otherwise. However, we are expecting a temporary bottom early
next week (Monday-Tuesday) because the hourly extreme oversold signal “A+ Tier”
setup is close to completing. This means that a 40-50 deadcat bounce may be in
the works that could extend higher. This only remains valid if 1892-1900 holds
decisively on the first try as there’s no major support until 1880. Long story
short, this means that we are looking for a bottom from 1892-1900 for 40-50
points worth of deadcat bounce at this moment.
If bulls are unable to defend the 1892-1900 major support
area, then next major supports are located at 1880, 1865, 1850 and 1831.
Weekly chart perspective: Large perfect bear candle closing
decisively below 100SMA, if current bear train exceeds 1860 then a larger
breakdown setup is forming.
Monthly chart perspective: The ‘hold half and go’ monthly
candle setup from October is no longer valid at this time unless a massive
sticksave happens next week.
P.S. Know your timeframes in this upcoming week as there
could be a major buying opportunity for the temporary bottom/bear train
extension.
