ES was in a bullish ascending wedge pattern dating from October of 2021, which is when we double bottomed into our culminating Santa Rally for ATH's.
It broke it on the daily with the nasty gap down and close below the 4600 level.
Bulls ideally want to get back up above the 4600 level to get back into the bullish pattern.
Bears can get this down to 4520 and even the 4480 levels that marked the previous bottom.
I'd be extremely surprised to see us go any lower than 4480, but Mr. Market will have his way.
Until important supports are met and/or we get back above 4600, I'd be wary of longs period.
Especially during OPEX week.
I'd ideally want 4480 tested and that is when I'd scale in long.
Can overhedge by buying short term puts once 4480 is breached, and once another important support is met (4430 --> 4400), can take profits on overhedges and then proceed to scale fully in long once reversal is confirmed.
It broke it on the daily with the nasty gap down and close below the 4600 level.
Bulls ideally want to get back up above the 4600 level to get back into the bullish pattern.
Bears can get this down to 4520 and even the 4480 levels that marked the previous bottom.
I'd be extremely surprised to see us go any lower than 4480, but Mr. Market will have his way.
Until important supports are met and/or we get back above 4600, I'd be wary of longs period.
Especially during OPEX week.
I'd ideally want 4480 tested and that is when I'd scale in long.
Can overhedge by buying short term puts once 4480 is breached, and once another important support is met (4430 --> 4400), can take profits on overhedges and then proceed to scale fully in long once reversal is confirmed.
Comment:
Uhhhhhh....
Did not think ES would break down THIS MUCH on the daily.
However, it did bounce where it needed to.
My only concern is that it has tested the support multiple times now ~4280-4250 mark, and the more you test it, the more it is prone to break it.
Look out below for 4125 --> 4040 --> 4000 if the important supports break.
Did not think ES would break down THIS MUCH on the daily.
However, it did bounce where it needed to.
My only concern is that it has tested the support multiple times now ~4280-4250 mark, and the more you test it, the more it is prone to break it.
Look out below for 4125 --> 4040 --> 4000 if the important supports break.
Bulls want to base here and recapture important 4600 level close on the daily to get back into the channel for an even bigger bull run.
Leave it up to OPEX week to destroy retail!
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