The Double Top Resurrection
Today’s session started off similar to our expectations from the previous report. Overnight session retested support and there was a spike under the 1995 level for a few minutes but ultimately it was sticksaved. Remember, this was the major support that bulls needed to hold for the 2020 and 2027-2030 deadcat bounce targets and ideally we wanted 2002-1998 to hold. Basically, the bulls were pushed against the wall overnight and came out ahead.
The day session opened
and the first two hourly candles were top and bottom wick which further
proved that it was just going to be an inside day shake according to expectations.
Let’s fast forward to the key things to note from this session, there’s a micro
double top/bear pennant on the hourly chart. Also, the daily doji candle
closing could serve as a daily 100SMA rejection for the continuation of the
daily bear train. Remember, we treated this bounce from 1988~ to 2010/2020
targets as a deadcat bounce only and the context was a daily bear train vs.
hourly deadcat bounce roadmap. With the bulls getting rejected at lower
resistance and keeping them below the 38.2% fib retracement, this bodes well
for bears if they are able to break below 1980 tomorrow/this week.
What’s next?
Daily closed 2010.25 and still below all daily moving
averages. The large daily double top
setup is alive once again which is very similar from the one in the December
14 and 20 KISS reports.
Today’s session had a micro double top in the hourly chart
which was where the bears rejected at the 38.2% fib retracement yesterday. This
means that this is very advantageous for the bears as bulls were unable to even
retrace to the usual 50% level according to our hourly extreme oversold signal
deadcat bounce standards. Currently, ES is trading at 1988 as of writing, which
means we cannot maintain our previous primary projection bias of a bounce
revisiting 2020 and 2027-2030. This does not mean the immediate bearish targets
open up either because the range is now 2017 vs 1980.25 for the shake.
A breakdown of 1980
would open up the large daily top setup to targets at 1937.5 and 1891.75 (which
are the 50% and 100% of the measure move). If you recall the December double
top setup, it had a 100% measure move to 1892 so the current setup is almost
identical. The main ingredient now relies on the bears finally do their job and
not letting the bulls sticksave once again.
There are no immediate targets right now and the 2020 target
from before is considered a failure even though it reached 2017 high last night. The important levels are to break 1980
which open up immediate targets at 1970, 1950 and 1937.5. Be cautious of a
1980.25 vs 2017 shake for the time being.
For the bulls, as long as 1980-1985 key support area holds
tonight/tomorrow they have a sticksave potential setup. This could provide a
great risk vs. reward quick bounce trade. Remember, it’s key to know and
understand your timeframes.
Current plan for
tomorrow:
If overnight session is able to sustain under the 1995 level
or breaks 1980, then will only enter short positions at resistances and ride
the bear train. Will only trade long positions if reward is 2x the risk, for
example buy 1983 with 1980 stop for 1989 minimum target. Going against the
established daily train is not optimal for both novices and veterans and it
greatly impacts long term profitability as the probability is not on your side.
