Window For Bears Rapidly Closing

In last weekend's update I wrote:  "My expectation is that we are very close to at least a temp top if it did not already happen on Friday… And with the Odds indicator going to the sell side, we need either one of micro1 or micro2 to also go to the sell side for us to exit long positions and go short. With internals being on the weaker side, I am expecting us to get an exit on our long trades and a possible short trade to also set up very soon.. But we continue to hold longs until that happens. IF we do get that elusive pullback into the month end, I am looking at somewhere around the 4000 area and maybe a little lower to be backtested before we continue back north."

What actually happened is we had a pullback/consolidation during the week which held above the 4100 area on the Emini S&P 500 (ES).

What next for this week?  

Options data is bullish on review today. Internals are more or less bullish as well. Price action is short term bullish, medium term neutral and long term bullish. We are now short via the primary trade after booking longs last week Monday. 

Indicators are mixed right now with some of our internal indicators pointing higher and the rest pointing lower. Above 4200, micro2 will stop out and if this happens, we will get out of our short trades and flip back long via the comp trading system. On price, I see a lot of resistance in the 4180-4200 area… but looking at options data, the window for bears is rapidly closing.  So IF we are going to have a move lower to test 4050-4000 area, then it has to happen within the next week or so.  Otherwise, we may get back into the slow drift higher again into May expiry and beyond.  I will outline the trading plan and possibilities in a little more detail in The Smart Money room tomorrow.

Grey zone resistance is at 4184-91 and at 4209-4219. Support is at 4162-71, 4131-39 and 4114- 4105.

For Monday, daily pivot is at 4160.  Resistance R1 is at 4192.5 and R2 at 4219.5. Support S1 is at 4133.5 and S2 at 4101.

All the best to your trading week ahead.

Princely Mathew hosts The Smart Money premium service at ElliottWaveTrader.