ES - Is the bottom in???
Updated
Fellow traders,
ES is in a tricky place. Many traders are getting excited about longs this week and I can't blame them. However, my strategy is painting a different picture.
Last Tuesday and Wednesday we saw 3580 holding LIKE A BRICK WALL. It is very clear institutional entities had an interest in defending the level. 3600 - 3580 was a battle zone that I don't want any part of.
Last Thursday we had a mega hammer bar that pierced the low with power, then reversed and closed at the MA's (moving averages). In all technical respects, this bar is telling us to tighten expectations on shorts. It's location in the median range (3720 - 3520) reduces it's value as a bottom indicator. Clear respect of the MA's tells us this was a controlled lift from the low.
Friday was ALMOST an equal and opposite bar, however, the body of the candle is completely inside Thursday's candle body with it's upper wick smaller than Thursday's down wick. The value of this bar is very low.
All this being said, last week was a balance as expected. Last Sunday I had mapped out a few short entries, one at 3720 that did work well later in the week. Tuesday I raised an order on it and Wednesday the order was removed based on the daily chart structure. Specifically I don't like how the MA's are bunched together.
So I'm at an impasse. Chances are this week is going to be unprofitable for many traders. There is NO clear direction for my strategy. 2 conditions that would prompt my interest this week
1. Solid moves above 3680 with verified long entries around 3720
2. Daily closes below 3580 with short entries round 3520
I bet this would be a good week for range traders, but I'll leave that fun for those folks.
ES is in a tricky place. Many traders are getting excited about longs this week and I can't blame them. However, my strategy is painting a different picture.
Last Tuesday and Wednesday we saw 3580 holding LIKE A BRICK WALL. It is very clear institutional entities had an interest in defending the level. 3600 - 3580 was a battle zone that I don't want any part of.
Last Thursday we had a mega hammer bar that pierced the low with power, then reversed and closed at the MA's (moving averages). In all technical respects, this bar is telling us to tighten expectations on shorts. It's location in the median range (3720 - 3520) reduces it's value as a bottom indicator. Clear respect of the MA's tells us this was a controlled lift from the low.
Friday was ALMOST an equal and opposite bar, however, the body of the candle is completely inside Thursday's candle body with it's upper wick smaller than Thursday's down wick. The value of this bar is very low.
All this being said, last week was a balance as expected. Last Sunday I had mapped out a few short entries, one at 3720 that did work well later in the week. Tuesday I raised an order on it and Wednesday the order was removed based on the daily chart structure. Specifically I don't like how the MA's are bunched together.
So I'm at an impasse. Chances are this week is going to be unprofitable for many traders. There is NO clear direction for my strategy. 2 conditions that would prompt my interest this week
1. Solid moves above 3680 with verified long entries around 3720
2. Daily closes below 3580 with short entries round 3520
I bet this would be a good week for range traders, but I'll leave that fun for those folks.
Note
Monday's candle has engulfed last Thursday and Friday's large bars providing strong evidence of a local directional change here. We also got a close of 3689, which is above 3680 laid out in condition 1.
I am officially bullish, I'd love to see a close above 3720 tomorrow, a pullback Wednesday, and a long entry Thursday.
Note
Price has closed above 3720 and shown verified respect of the level, indicating a quick flush down should be met with buyers. If price is still respecting the level Wednesday morning we may raise an order.Note
Comment: Order raised to buy +1 MES 3680Stop 3595 (-$425)
Target 3860 (+$900)
Trade active
Entry order filled 3680Note
Position held into the weekend. Today’s price action is very encouraging. Let’s see what next week holds.Trade closed: target reached
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