The Breakdown Acceleration Phase
Today’s session started off with last night’s 1HR 50SMA rejection that soon broke the important 1980 level and triggered the immediate targets to open up. It rode the 1HR 8EMA bear train overnight and the first target at 1970 was considered fulfilled already (1971.25 low) before the day session even opened. Subsequently, this level provided a great temporary bottom for a relief bounce back into the 1HR 20EMA resistance so bears could reload shorts at around lunch time. The main take away from this session was that the bears are in a breakdown phase for the large double top roadmap. Remember, the potential is 100% measure move to 1892 and even half of that targets 1937.50.
What’s next?
Daily closed at 1986.75, but bears
couldn’t end at the lows as bulls sticksaved during the final hour. However, as
of writing ES is trading at 1964 as the sticksave was once again rejected at
the 1HR 20EMA resistance overnight. Obviously, this week’s overnight movement
are largely impacted by China’s 7% on Monday and right now. For ES, this is most
likely the acceleration phase for the bearish breakdown that should become a
1HR 8EMA train.
The immediate targets from previous report are now confirmed
as the 1980 level was broken last night. The short-term roadmap points
to 1960, 1950 and 1937.50. The daily chart is already a 8EMA
bear train as price is below all moving averages.The daily
chart is already a 8EMA bear train as price is below all moving averages.
The 1950-1956 area is considered a major
support so bulls have a potential to look for a relief rally there. (1956
represents the 61.8% fib retracement from Nov high to Sept low). Remember, this
is a breakdown acceleration phase so we will only looking to reload shorts at
resistances and not initiate long positions. The only exception being whether
an hourly extreme oversold signal confirms at the 1960, 1950 or 1937.50 levels
for a quick deadcat bounce trade.
P.S. it’s called a train for a reason,
it’s a mental note to remind ourselves and everyone else to not step in front
of it but rather hop on to ride it until it fails. We learned this key lesson
from many previous mistakes as the probability just isn’t on countertrend
trades in the long run.
