ES #F 081006 Hook Trade

ES #F started falling after terrorist threats were made in London overnite. It found support at a prior level of 1262.50 before retracing. Old Support becomes new resistance at yesterday's low of 1268.25 making for a LIS. It was a perfect Hook trade entry sell short with small limited risk. Looking for lower lows and a possible trending day down as the ES #F daily chart is perfectly positioned for this. IF we retrace higher, THEN I will look for sell signal to enter sell short for lower lows until I see a buy pattern made on the daily chart.

Update at 9:36 EST: Market made slightly higher high to complete 5 waves up. Now it can pullback. Looking for eventual lower low today. So far, we have made a 3 wave pattern into 1270.00 high. The 3rd wave had 5 waves. After 5 waves, I usually look for a pullback and that is exactly what we had, making a .618 fib retrace before finding s/t support. So, do we range for a small wave 4 to go higher, or is 1270.00 the end of a big Wave 4 for lower? So far, the 8min chart tells me we go lower. I have to remember the daily chart says down.

Update at 10: 02 EST: Nice Double top for low risk entry sell short.

Update at 9:52 EST: IF we are in a smaller degree Wave 4 pattern, THEN a higher high will make 5 waves. Price action is a little positive, and mkt might be wanting to look to close the gap. However, it needs to break the current of high of 1270.00 before it can go higher. So far, the pullback from 1270.00 has not overbalanced, so we are still in the same degree wave. The 60min and 120min charts are in position to have buy patterns trigger IF the market powers up above 1270.00.

Update at 10:22 EST: The charts are looking more bearish. The daily chart is in perfect position for further downside. So, it is possible that we can have a swift move down. Watching lower timeframe charts carefully. The range is getting narrower and narrower. So, do we break this range to the upside or to the downside?

Update at 10:30 EST: Market showing some strength at this point. IF 1270.00 breaks, we can go a lot higher, as that will trigger buy patterns of higher timeframes.

Update at 10:49 EST: Tough market to trade today. Very choppy. Scalpers market. 8min says down now. Have to be quick to grab a point or 2 in this market. 8min chart has shooting star for indecision. Can yesterday's low at 1268.25 hold as support for higher? The 60min chart says that is possible. 8min getting toppy. The key is to sell resistance and buy support. Resistance currently at 1270.50. Upside momentum building. We are trading above yesterday's low of 1268.25 for now. The key is for this to hold for the market to move higher. Upside targets now: 1272.25, to 1276.ish.

Update 11:09 EST: gap closed. Looking for more upside after pullback if we get one.

Update at 11:50 EST: Market pulled back sharply after finding resistance at 1273.50. This move up looks corrective. 60min and 120min charts both say no sell pattern as of yet. Market probably needs to go back up to test the high at 1273.50. For now, we have backend resistance at 1270.00 and support at yesterday's low at 1268.25.

Update at 12:05 EST: Bounce up to 1272.00 provided opportunity for a sell short entry, if one believes that the high has been put in. The sell is supported by 1) .707 fib level 2) doji on 6000V chart, and hanging man on 30min chart.

Update at 12:37 EST: 60min. chart and 120min chart still bullish. However, 1272.00 is big LIS. Old support is new resistance.

We are still below important moving averages on the higher timeframe charts.

Update at 2:14 EST: 1276 ish target hit. Looking for potential pullback.

Update at 15:14 EST: We did an ABC 3 wave move up into resistance at 1276.50 (.382 fib levels).