ES #F 071706 "Are we there yet?"

The current resistance is at yesterday's high of 1300.25, which is a prior level of s/r or LIS. We have a nice gap down on overnite globex trading. The daily chart shows the market is overbought, and getting a little toppy. It looks that there are 5 waves up into the 1300.25 high. The 120min and 60min both indicate that the a retracement of the last move up is in progress. IF we have 5 waves up off from the 1231.00 low, THEN a bigger retracement is possible. Today's trading activity and range should provide a clue as to whether or not a s/t high has been put in at 1300.25 for now.

Lower timeframe charts currently look a little bearish. We are currently trading below the 34ema and the 89sma on both the 8min and the 6000V charts. The 30min chart shows the market to be right on the 34ema. Both the 60min and the 120min charts are still above their 34ema lines. So far this morning, we are trading just below the prior high of 1297.75. The 120min chart shows a potential sell signal trigger currently. IF 1295.75 breaks acts as a LIS, then more downside will probably follow.

Update at 10:25 EST: Double top for a quick sell short, as the 1300.25 held as resistance for now. Is this a wave 4 of smaller degree, or is this wave b of next degree corrective wave? On this move up from the 1295.50 morning low, we had 5 waves up. Usually, after 5 waves up, I can look for retracement of the move, with the usual target of .618 fib level. The real resistance level is 1299.00 -- we haven't been able to close above that level on the 30min chart. Can we manage to close above it this time around? The 120min looks like it could go either way, and the 60min chart is currently bullish right now. However, that 1299.00 LIS is in the way. Looks like market wants to try and test the morning lows first. If that meets with resistance (erh ... support), then the only way to go is up.

Update at 10:57 EST: And up we go to make a higher high. With this move up, we finally have a close above 1299.00. Onwards and upwards we go, as the higher timeframe charts are still bullish. Ooops, with this higher high into 1300.50, we have 5 waves, so expect a pullback here.

Update at 11:22 EST: Once price closed above 1299.00, we started going up to make higher highs; Upside targets are: 1304.00, 1306.00, 1307.25, 1309.25.

(Note to self: remember to look at the weekly chart pattern. We had not 1 but 2 buy signals screaming buy buy buy, cuz we r a goin' up).

Update at 12:25 EST: Small PRZ here -- 1303.00 is both a 1.618 and a 1.27 fib level; we have possible 5 waves up now into 1303.00 -- However, 60min and 120min still mightly bullish looking. Interesting note -- 1303.50 is a 2.618 fib level.

Update at 14:11 EST: We had 5 waves up into 1304.75. IF 5 waves complete, THEN look for abc retracement into .618 fib level of range of the 5 waves. Likely the high has been put in for the day; we have overbalanced and heading lower.

Update at 15:14 EST: Market retraced .786 of the 5 waves up. We have now made a retrace of the .618 of the move down; Could go higher to .707 to .886 fib levels before turning down again. Reason for thinking this is the 1) price action, which is kind of bullish and 2) the 8min chart, which tells me that while there is a buy signal off the 1297.50 low, there is no sell pattern just yet. Technically, we do have a bearish gartley butterfly pattern in place for the sell short trade at the 1302.00 or .618 fib level.

Any serious selling (if there are any) probably won't happen until tomorrow, after options expiration .... or .... the markets can do anything at anytime!