ES #F 081606 Plan the Trade, Trade the Plan

Market powered up on the 08:30 a.m. report. Upside targets are: 1293.75, 1295.20, test of 1297.75, and 1301.25 to 1309.25 if we remain very bullish. Watching lower timeframe charts for change of direction, and evidence that a top might be in. It is possible that we are in a wave 4 congestion wave, and a higher high than 1297.75 will complete a wave 5 pattern for a bigger reversal. Price action pre-market is bullish still. The alternate count is that we are in a small b wave with a test of the 1297.75 -- with a c wave for lower upon hitting resistance.

Update at 09:23 EST: 1295.00 is a 1.27 fib extension. Looking for possible deeper retracement off this level of resistance, as it looks like we have a small 5 wave structure up into 1297.00. Something to keep in mind is that this is options expiration week.

Update at 09:42 EST: Higher timeframe charts still bullish. 8min chart still bullish also. We hav been trending upwards into 1295.00. We can see "daylight" on the 34ema. We could be stuck in a consolidation range for a bit before we move one way or the other. Globex high of 1295.00 and OP (opening pivot) of 1294.50 are s/t resistance levels now. IF we have 5 waves up from globex low of 1286.75, THEN, we should make an abc type of retracement or correction into the .618 or lower. This should take us down to close the gap at 1287.75.

Update at 10:07 EST; Currently, we have s/t support off the .382 fib level, and a buy signal off the 6000V chart .... we should be retracing the move down from the high of 1295.00 before deciding to move lower. We have mixed signals and that is usually a good indication of congestion/consolidation. 8min chart remains in sell mode with no buy pattern yet. We have backend resistance at 1293.50 for the moment. IF we fall, THEN next level of s/r is at yesterday's high of 1290.50.

Update at 10:26 EST: We have possible 5 waves down ... abcde for corrective wave, into 1291.75 support. Charts look more bearish now, but usually after 5 waves, we should get a retracement of some kind. Both the 120min and 60min charts still are bullish, with no sell signals triggered as of yet. Since the higher timeframe charts are still bullish, one could have taken the JOT long entry off the 1291.75 low -- it was a 5034 pattern, and one could have targeted the .618 to test of high as a profit target.

Update at 10:46 EST; We had a double top at 1295.00 for a good sell short entry with tight stop. looking for test of the low at 1291.75 as possible. Have to keep in mind, the bullishness of the 120min and 60min chart though, so the sell short is scalp opportunity only.

Update 10:57 EST: 5 waves up into 1295.75 which is a 1.27 fib extension. Looking for retracement of the 5 waves up now.

Update at 11:11 EST: .618 fib target hit for this retracement. No buy signal yet, so lower still is in the cards.

Update at 12:11 EST: We have strong bullish higher timeframe charts still. Looking for higher highs for the day. 1.27 fib target at 1296.50 hit.

Update at 12:26 EST: Test of 1297.75 high; Sell short with tight stop good risk/reward trade opportunity. We are within 1 pt of the 1297.75 high. Note that all higher timeframe charts remain very bullish.

Update at 12:46 EST: Possible 5 waves up now into the 1297.00 high. Looking for retracement of last move up from 1292.75 low. Let's see if we get it or not. No sell yet off the 60min chart though.

Update at 13:00 EST: Alternate wave count indicates that 1 more high is possible, but will be watching lower timeframe charts for direction. Right now, 8min has a sell pattern in place and no buy pattern yet.

Update at 13:36 EST: Market has now dropped below the OP. We need to stay below the OP to have a deeper retracement of the move up. Today is a tough day to buy and hold; the moves up have not been impulsive, but more corrective in nature.

Update at 14:27 EST: Double top now at 1297.00. We had 3 waves down then 3 waves up into the double top. A test of the 1293.75 low is possible. So far, we have had a narrow range day, but slightly bullish into test of prior restistance at 1297.75. Trend is still up, until the current low of 1293.75 gets taken out.

Update at 15:40 EST: 1300.25 target hit; it was a prior visual s/r off the daily chart. Higher timeframe charts are still bullish; this last move up is with divergence that can be seen on the 8min chart. Next up are the 1303 to 1306 to 1309ish targets