Chart on Emini S&P 500 (ES): Grinding Higher

E-mini S&P 500 Futures: Keep It Simple Stupid – High Level Consolidation, Continued Bullishness Into Month Of June

Monday’s session was fairly straight forward as it was an inside day within a potential inside week/high level consolidation context. Basically, the RTH session was confined to 3059-3027 range which is about 1%. In additional, as you may be aware by now, the average range per day has been narrowing for the past few weeks due to this methodical grind up and slower momentum when compared to Feb-April 2020. As previously discussed, the recent action is very similar to year 2019 as we’re seeing flashbacks from all the market tendencies of the easier overnight grind up and then chop around during RTH. (nowadays, most gains have been made during globex vs RTH, hence easier setups during the overnight as discussed)

The main takeaway remains the same from the end of May given that the bulls accomplished their key goal by ending the May monthly closing print at the dead highs in order to enhance the odds for upside momentum. The bulls did what they had set out to do since April because it’s been an on-trend upside breakout back to the 61.8-78.6% fib retracement of the entire drop (3397.5-2174 range). As discussed, the bears ran out of time as they failed to capitalize on all breakdown setups and the bull train has been on an accelerated phase riding the daily 8EMA upside alongside with price action hovering above the 200 day moving average. All this is buying time for things to catch up and elevate even more by resetting price action, internals and momentum...etc

What’s next?

Monday closed at 3053.3 as an inside day around the range high area of the past few days. The overnight produced a decent long setup in the 3035-3040 region for the higher lows and higher highs play as the overnight bulls hit a high of 3075.5 which is just under our key level 3078 so it means that price action has been acting very methodical lately during the globex sessions.

Copying and pasting a core section from our ES trade alert room’s premarket gameplan report where we demonstrate real-time trades and educational lessons. For additional details/key levels, please read or subscribe to the other report in entirety first to understand context if confused. 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. ES Trade Alerts room has been outperforming the S&P benchmark alongside with many competitors as demonstrated with our official 5 year track record on EWT.

  • For now, the 4hr white line projection from last week remains king given the high level consolidation/grind up towards 3135 target
  • Our intermediate target is now confirmed at 3135 when price action remains above 2947.5 and specifically when above 2990s due to immediate momentum
  • Friendly reminder: the past ~18 sessions, the overnight globex session has showcased better/easier setups than the RTH duration so traders must be aware of the current environment when trading
  • Zooming in, treat 3000-3050s or 3000-3060s as a high level consolidation/bull flag structure. Buy near support and don’t get caught in the middle because the edge becomes low. Wait for the eventual upside breakout towards 3135 if price action continues to remain strong
  • When price action continues to showcase higher lows structure with 2947.50 vs 2965.5; then all dips into trending supports are considered buyable. Extension targets have been marked yesterday at 3050/3100/3135 with the former already being fulfilled
  • When above 2992/3000, the bull train is in an acceleration phase on the daily trend chart
  • Conversely, a massive breakout failure/trap would be considered if price action falls below 2992 and then close below 2947.50 on a daily closing basis.
  • For reference, as of June 1st, the daily 20EMA has grinded up to 2950s now and this number will keep grinding up as the market holds steady in an uptrend.
  • Market is definitely at a major inflection point; please see daily/weekly/monthly charts. (this means that you always have to be PREPARED just in case of a ‘shit hits the fan’ moment if a quick turnaround from bears appear. You always have to be prepared for anything even if it is low odds at the current time)
  • During the May 11-15th week, price bottomed out at 2760.25 vs our 2752 pre-determined key support level, we bought the dip at 2765 and the market has bounced way more than 100 points given our initial expectations. When bulls are in charge and bears are trapped market participants, there is no reason to doubt until support actually breaks and confirms some sort of breakout failure
  • We are on hold for our intermediate bearish bias until there’s a decisive breakdown below 2752, followed by 2717 indicating immediate momentum aligns with micro+intermediate timeframes. Know your timeframes!
  • Dec 2018 lows to Feb 2020 highs range: 61.8% fib = 2729, 78.6% = 2548, 100% = 2316.75
  • Feb 2016 lows to Feb 2020 highs range: 50% fib = 2600, 61.8% = 2411, 78.6% fib = 2143, 100% = 1802.50
  • There’s some real panic in the global markets and it is greatly appreciated because we’ve been lacking that extra juice in the first week of March as it was relatively easy or a bit too calm like we demonstrated in real-time
  • We’ve been fully prepared with lots of cash on hand to re-deploy into long term investment accounts in case the shit hits the fan and It looks like we may get our wish for fire sales across the globe
  • If you are in the same age bracket as us in like 20s, then, you have the next 30-50 years for dollar cost average for these plan B long term investment accounts, when the shit hits the fan you get a better long term average that will be worth millions
  • We are down to about 67.5% cash leftover and looking to deploy more as market hits near our support levels, the bigger the drop…the better for our long term average cost as the market has been giving us a great discount since the breakage of the daily 20EMA trend that occurred in late February. Know your timeframes for these long term non-leveraged accounts!
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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.