The Temporary Bottom Train Part 2
Today’s action started off with the backtest
of support during the overnight session that was sticksaved at 1899 and
subsequently the hourly candle had follow through from the bulls. At 4AM, bulls
broke above 1HR 20EMA and the downtrend resistance line. This immediately paved
the way for our immediate targets of 1933.5 and 1943.50. Basically, they ran
the stops for the “swing” futures longs (including us) and then blasted off
from the feedback loop.
By the day session open, ES traded as high as
1940.25 and formed an hourly doji vs. the major 1HR 100SMA resistance. We
anticipated this as a temporary top and that bulls needed to backtest the 1HR
20EMA support at 1920 first before resuming up. The first try at 1HR 20EMA was
sticksaved and made it to 1926.75 before collapsing and breaking below 1HR
20EMA. This created a mini 15m 20EMA rejection bear train setup and the bullish
setup for 1955 target was looking grim and on life support. The main takeaway from
today is that bulls were pushed to their limits once again similar to yesterday’s
double bottom action at the 1892.50 low vs. 1892 major support. Today, it broke
important supports of 1920, 1914-1912 and 1908 before being sticksaved at 1905.75.
Afterwards, the hourly candle closed as a bullish engulfing bar and the rest is
history.
What’s next?
Daily closed at 1922.50, it was a top and
bottom wick candle with a larger body than yesterday. Bulls formed a higher
low, but they could not close strong because in the last 30minutes they gave up
10 points. However, as of writing the overnight session is trading at 1937 and
inside a breakout phase for 1950-1955 targets.
The immediate targets of 1933.50 and 1943.50 from
last night were considered fulfilled at the day session open as 1HR 100SMA
quickly proved to be a major resistance.
The extension targets are 1950-1955 with major
resistance at the daily 8EMA currently 1952.6~. Remember, this is a mini bull
train off the temporary low of 1892.50 within the daily+weekly bear train
context. Note, extension targets are not high probability compared to immediate
targets so there is a difference. The market is in a very complicated phase
here with hourly bull train battling against the daily + weekly bear train,
it’s imperative for everyone to understand their timeframes and trade
accordingly.
