#ES_F Daily TF Longer Outlook UpdateBack in October we broke down Daily Outlook after we had topping signals and strong trend break. When that was posted we were looking to two possibilities after the trend was broken, we either needed to get back under Smaller MA without reaching the top to show no acceptance in New Range to then proceed with trend change and a slower correction or stay above Smaller MA to push for higher VAH/Edge areas to make this our range for some time and possibly balance between VAH/VAL with pushes out of them finding their way back in.
What ended up happening is we got a push back into MA but closed over it and more buying came in to push and gap us over VAH into Range Top, of course we had no way of knowing that Range Edge would be the top but we pushed into it and showed clear topping/rejection from it.
This time Edge Top rejection was much stronger and got us back under VAH/Smaller MA, flushed VAL with Medium MA which again provided Temp Support and as mentioned we got that balancing action between VAL / VAH with pushes out rotating back in until we broke/closed under Medium MA and got more selling which took us under Range Edge Low, flushed Previous Range VAH and Large MA but as that was first tag of big MA after spending quite some time away it naturally provided buying to get us back in New Range which we showed acceptance in by Previously Tagging the Top which meant once price is back in, it doesn't need much big buying as it just wants to rotate back towards Supply which so happens to be at/over VAH.
Where can we go from here ?
The flush under Edge Low temporarily changed Medium Trend into correction but the bounce didn't let us stay in correction and instead we go that rotation into Supply and are now technically again in Up Trend over MAs.
Yes we can stay in up trend and continue with sideways/strength/inside days that will keep us up Over/Around VAH while we let Smaller/Medium MAs catch up and continue pushing us towards Edge Top and maybe even push us into New Range Above.
But few things we have to consider... We are at the top of Big Big area (under new price level of 7000), We had a huge run this year, We have showed multiple Topping Patterns here around 6800 - 6900 +/- Areas, We have showed good trend breaks and attempts at trend change, We are back in area of Supply where bigger failures/sellers have came in, We are extended from Medium and Small MAs which provide support in New/Untested areas and this time we are extended away into Supply Area not New area.
With all that in mind will we have strong buyers who will come in here and start buying the extension inside Supply ? Or was this extension all momentum buyers who aren't planning to hold us up.
My current bias is if we look at Cost Basis break out area up to our Top, then the Flush to Large MA and back up, to me it looks like one side of a bigger M topping pattern which happens at bigger tops. If that is the case then either Friday or somewhere close we should be marking our Lower High and if buyers from Last Week will not hold this then price will want to head back towards some sort of Support which would be Smaller MA as the first spot which means back under VAH. Something to be careful of is that since now VIX is down, Volume will be down as well with holidays coming which means even if we start moving down it might be more of the same way we got up here last week which was more of Slower Balance(Back and Forth) Up days. Way down could be similar with slower balance down days.
From there Smaller MA and areas under it can Provide Support and keep us in some sort of sideways action around it BUT as long as we keep holding under VAH 860s - and under Edge Top 920s then that will mean Weakness, we would look for a move under VAH that can stay under it even if it consolidates around, then into Mean where Medium MA should be by the time we get there, of course it could happen fast as well but have this feeling that it might be a drag this time around IF it happens.
We already have a week of fresh Supply up here from Last Week and if we again get under Smaller MA and can again change trend under Medium MA then that will bring in more weakness to continue for lower targets back towards VAL which could also provide holds BUT if trend stays in correction and we are to follow through with the M pattern then we will eventually see a move back under Range Edge Low and aim to take out the low we made on the last Flush Nov 21st which would be the M middle which could give us more weakness to take us towards our Correction Areas lower into the Cost Basis. Again if market has topped out and all the large selling for now is done, if this is to happen then careful of forcing for it to happen quick as this can play out over a longer period of time as market may need a longer breather/correction/consolidation before it can start a new stronger trend again.
If we don't end up getting a correction under Medium MAs under VAL/Edge then staying over VAL can keep price in balance with us going back and forth in 6700 - 6900s areas for some time, to not have a correction or prevent price balance and see more strength price would need to let some MAs catch up and push us over Previous High AND be able to stay above it, until then we will be looking at either more Balance or Balance with Weakness which can give us a correction.
