Charts on Emini S&P 500 (ES): Bears Running Out Of Time

E-mini S&P 500 Futures: Keep It Simple Stupid – Must Read, BTFD Favoured When Above Immediate Supports Part 2

Tuesday’s session played out as a ‘gap up and go’ structure that got faded in the final few minutes of RTH. If you recall, RTH opened at 2863.25 vs Monday’s closing print of 2827.5 so it was a +1.2% gap up and then price action continued in the trending direction for the majority of the day forming higher lows and higher highs as the northbound train goes towards the immediate targets. However, the bears made a counterattack around 2889.75 high which was against the 2890~ 61.8% fib retracement of 2965-2771 range and swiftly backtested into our key support of 2850 by the end of the day.

The main takeaway is that the bulls had a textbook gap up and go structure, but failed at the last few minutes when the countertrend bears mounted a successful attack in order to disallow the bulls from closing at the dead highs of Tuesday’s session. This meant that bears are not truly dead yet as it’s still an ongoing battle within this consolidation zone. Please be aware, the longer this consolidates/bull flags, then the chances become higher and higher for the ongoing bull trend/train given the context and momentum of the past few weeks. Bears are the ones running out of time right now and crapping their pants by looking for an immediate reversal to the downside every single day and have been failing miserably at it.

What’s next

Daily closed at 2859.75 and the daily chart timeframe’s structure is quite easy. Price action is trending above daily 8/20EMA as bulls held key support on Monday and has bounced +100 points since then.

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.

  • We’re bull biased: when above 2850, 2900/2916/2930 are the immediate continuation targets
  • When below 2850, 2830 and 2800 support levels open up immediately. Level by level approach
  • There is an ongoing feedback loop squeeze setup from 2771 Sunday night low and yesterday’s RTH low of 2788.50. Remember our rule, do not fight a train/feedback loop squeeze until the momentum actually turns. Otherwise, you will likely get killed 80% of the time dependent on timeframes.
  • 2771 Sunday low COULD be the low of the week already, unconfirmed, see how it develops.
  • 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!
  • As explained previously in our ES trading room, we’re still watching this development closely to see if our rough gameplan plays out as we work with this mental framework if price action confirms
  • Zooming out, continue to watch daily closing prints 2316.75 vs 2650 battleground given  the current situation of the market backtest against the Dec 2018 lows (March 20+23 closed below 2316.75, then from March 24-May 5th closed back above 2316.75…confirming the temporary bottom setup in development. See if we get a complex W pattern on daily chart)
  • 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.