Market Analysis for May 17th, 2021

E-mini S&P 500 Futures: Keep It Simple Stupid – Deadcat Bounce Turning Into Sustained Bounce

Copying and pasting a section from our ES trade alert room’s premarket gameplan report. FYI, the ES trade room provides real-time entries and exits with pre-determined stoploss and target levels alongside with real-time lessons on strategy/risk management/psychology/momentum. We specialize in quick intraday alpha setups and short-term swings with duration of 2-5 days holding period. (some key levels + strategies have been redacted for fairness to subscribers)

 

  • Friday closed at 4173.25 which was decisively above our 4150 resistance so it confirmed that 4029.25 temp bottom is turning into some sort of a sustained bounce. Eventually could open up new ATHs again if price action remains base building higher lows and higher highs
  • Going into this week as an inside week approach, last week’s range =4238.25-4029.25
  • Lean on bullish trades when above 4100 and especially when above 4120-4150
  • Be careful of weakness if below 4100, it opens up the risk of backtesting last week’s low 4029.25
  • Bulls need a close above 4185 and 4200 in the coming days to confirm that they are able to leverage the current temporary bottom into a sustained bounce…back towards ATHs…etc
  • Essentially, bears couldn’t finish their job last week because the first 3 days of downtrend days were negeated by end of week sticksave back above resistance.

If you recall:

  • The current structure and context of this bull train is that the daily price action has been trending above the daily 20EMA since the first week of March
  • Then, this trend accelerated on April 1st when the price action broke above the multi-week resistance of 3950s-3970s the propelled the bull train to ride on top of the daily 8EMA for an entire month now until the May 4th breakdown into more significant support confluence.
  • Tuesday May 11th at risk of a short-term trend change on ES. FYI NQ+RTY already at lows
  • Wednesday May 12 broke below 4100 and confirmed a short-term trend change on ES. (decisively below trending daily 20EMA)
  • Thursday May 13 daily print confirmed short-term bulls stabilizing with the 4029.50 temp low 
  • Friday May 14 closed above 4150 and stabilized the price action with a significant temp bottom 

Additional context from past months remain mostly unchanged (copied and pasted):

  • The shit hits the fan (SHTF) level has moved up to 3965 from 3650, a daily closing print below 3965 is needed in order to confirm a temp top setup/reversal for the daily+weekly timeframe. (the current April 2021 lows which was the breakout acceleration point of the past few weeks) 
  • A break below 3965 would be a strong indication of weakness given the multi-week trend of being above the daily 20EMA train tracks. For reference, the first week of April, the price ation has accelerated on top of the daily 8EMA to indicate that the bulls are in full control and continuously making higher lows and higher highs every couple sessions bottomed 
  • Different timeframes in this report so it may be overwhelming, make sure you know which timeframes you are participating and adjust gameplan + execution accordingly
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Ricky Wen is an analyst at ElliottWaveTrader.net, where he writes a nightly market column and hosts the ES Trade Alerts premium subscription service.