ES #F 081806 Options Expiration Time

The bearish gartley butterfly went to first target of .786 fib for the globex low. It found support there, and is looking to move up. This formed a small bullish gartley butterfly for a move up. We still have mixed signals for the time being, so the open should be interesting, given that it is options expiration. Yesterday's abc into .618 fib was a 3 wave pattern, with a 5 wave triangle in the wave c position. At least that is how it is described in the Myles Wilson Walker book. The upside targets for this bullish gartley butterfly are: 1301.25, 1303ish, and test of 1304.75 high. If market remains very bullish, THEN 1306, 1307.25 (confluence here), 1309.25ish.

Update at 09:05 EST: First target for bullish gartley butterfly met. 120min chart remains bullish.

Update at 09:27 EST: Second butterfly target at 1303.00 hit.

Update at 09:30 EST: Third target at 1303.25 which is a .786 fib ... making another bearish gartley butterfly for a good sell short at the open. However, keep in mind that higher timeframe charts remain bullish still for the time being, especially the 60min chart. So, watching lower timeframe charts for initial change of direction.

Update at 09:50 EST: Downside targets for this bearish butterfly are: gap at 1301.00, 1300.25, 1300.00, 1299.50, 1298.50 test, 1297.25 -- and lower. Price needs to trade above 1300.25 LIS for market to continue higher. IF it falls thru 1300.25 and stays below this, THEN we can see lower.

Update at 09:55 EST: IF this is a wave C, THEN we can drop pretty quickly. Looking for 1278.75 at the .618 of move up from 1262.50 as initial target if the top has been put in at 1304.75 for a bigger retracement. That would probably be a target for next week. For today, IF we break thru 1297.50 support, THEN I will target the 1293.00 for this move down.

Update at 10:03 EST: Short term support at prior low of 1297.50 for a small bounce. Higher timeframes more bearish now. Looking for eventual lows if unable to trade, and stay above 1300.25 LIS.

Update at 10:29 EST: Now the next LIS to contend with is 1297.75. We need to break and stay below this LIS to continue down. IF we have 5 waves down, THEN we have to be aware of a possible retracement back to the .618 fib or 1300.75 to 1302ish. Looking to shorter timeframes for evidence of retracement. Higher timeframes remain bearish.

Update at 10:48 EST: Market did in fact make 5 waves down, and now we have retraced back to previous LIS of 1300.25 for resistance. This makes for a possible JOT sell short with the 5034 pattern, but it is not the ideal pattern, as we have mixed signals. So the JOT would be for a quick scalp only. We do however, have a small 3 wave pattern retracement into the 1300.25 LIS. IF the 1296.75 low holds, then a retest of the low will be a buy opportunity.

Update at 11:05 EST: .618 fib level target hit for the retracement of the 5 waves down. Plan the trade, trade the plan. Still mixed signals... which means we might be stuck in this range for a bit. Next upside targets are: 1301.25, 1301.75, 1302.50 and so on to test of yesterday's high at 1304.75, Still no sell signal off the 8min chart, but we do have 5 waves up now into the 1301.25 high. IF we have 5 waves, THEN look for a 3 wave retrace of the move into .618 or lower. Also, the 120min still says downside likely.

Update at 11:35 EST: We have now retraced to the .786 fib of 5 waves up, and into the 1297.75 LIS yet again. Will it hold as support, or will it break for lower? In any event, it is a buy based on Pesavento methodology. If long, THEN target test of the 1301.25 high -- to be conservative and safe. The 120min chart says we are stuck in a range.

Update at 12:04 EST: Still stuck in range; 1300.25 LIS is resistance again. We need to clear this to go higher. 15min and 30min chart says that this is possible, so need to watch carefully. The 1300.25 LIS is also .707 fib retracement of the move down from 1301.25. So that would be a good sell area with small risk.

Update at 12:24 EST: Price action slightly bullish. IF we are in a bigger wave 4, THEN upside targets are: 1302.25, 1303.75, test of 1304.75 and higher -- 1306.75, 1307.25 to 1309ish for now.

Update at 12:31 EST: 1301.75 is a .786 fib of 5 waves down from 1303.25 -- This makes for a bearish gartley butterfly pattern and sell short pattern with small risk.

Update at 13:22 EST: small butterfly earlier did not work out; currently we have abc 3 wave pattern into bigger .786 for a bigger bearish gartley butterfly pattern to sell short. However, the price action today has been a little bit bullish -- caution is in order.

Update 13:43 EST: We were correct to be cautious. 1303.50 is a 1.618 fib target. Another sell opportunity. Now OP at 1302.75 is potential LIS and s/r. 60min very bullish still though.

Update 14:26 EST: better sell here against 1303.75. However, price action remains bullish.

Update at 14:49 EST: We have double top for a good sell with good risk/reward profile.

Update at 15:26 EST: mkt too bullish; higher highs coming soon. We have 5 waves up now into true double top at 1304.75. 1304.75 needs to break to go higher. Next upside target is 1306.50. to 1307.25