My thoughts on ES have not changed from the monthly close at the end of December. I am still bearish and not surprised by the price action as of yet. A suckers rally was expected with the massive red month we experienced in December as a good way to not scare people away and instead draw more liquidity into the market. The first major resistance zone I had marked was around 2650, this zone failed to hold off bullish momentum so I expect 2772-2774 to be the next major area to be watching for bears. In the mean time I will not be shorting until I start to see weakness and levels being lost on the 4 hour or higher. The 2774 area will be an important level to watch as this was the daily level that broke to produce the major downtrend we are currently retracing. In addition it lines up with a 1.618 fib extension from the first impulsive move we had at the lows of December. I will be playing a short at this area with caution because of the obvious liquidity zone we have above the triple tops where a lot of retail investor will be placing stop losses. This makes me think that a break of this peak is not out of question especially since there are untested monthly, weekly and daily levels above. My bearish sentiment will not change until we make new highs so a final short for me will be around 2783 with a stop loss at all time highs. My first targets for this bear market is around 1800, after this I will re-evaluate and decide what my plan is next.
Comment:
WE ARE IN THE LIQUIDITY ZONE. Longs should be cautious and shorts should be ready in the event we start losing levels. With the massive rally we have had since January this market will flush when the time comes. All time high is still needed to start to change my mind..