ES #F 082206 Consolidation Day

The current high is 1307.75 and low is 1298.50. The move down from the high is in a 3 wave pattern. We have made a retracement of the move down from 13074.75 to 1298.50 that stopped at a 1.414 fib level. Currently we just tested the 1298.50 low, with the market waiting for an 08:30 EST report. The daily chart shows that we are in a consolidation/congestion range. The important LIS is 1297.75 -- old resistance becoming new support. IF it fails, THEN I will be looking for evidence that it has become resistance, and will be waiting for a JOT (jump on trend) opportunity to go short. Technically right now, we have a double bottom and a long entry for a scalp off the 1298.50 test. We have a possible 5 waves down from globex high to globex low, so expect some retracement now.

Update at 09:00 EST: Upside targets for this long off 1298.50 double bottom - 1302.25 gap fill, 1303, 1304..00, test of 1307.75 and possibly higher. So long as the 1298.50 low holds, we have a chance of going higher and making higher highs. While we had an inside day yesterday, the daily chart has no confirmed sell signal as of yet.

Update at 09:11 EST: IF the 1297.75 LIS does not hold, THEN expect lower targets: 1293.75, 1292.25, 1290.50, to 1283.50ish.

Update at 09:20 EST: We had a sell pattern on the 8min chart; a JOT 5034 pattern sell short. Target is the .618 at 1300.00 and then test of 1298.75 low.

09:22 EST: This abc move into 1300.00 makes for a small bullish gartley butterfly pattern long entry. However, the indicator is in the wrong position, so no long yet.

Update at 09:30 EST: IF we break through the 1298.75 low and the 1297.75 low, THEN the 120min and 60min charts will be more bearish with more downside to follow. Small gartley butterfly off the .786 retrace at 1299.25.

Update at 09:40 EST: gap filled and also the .618 at 1303.00. More upside to come, based on 60min chart. Looking for 1307.25 gap to be filled.

Update at 09:50 EST: Short term resistance at the .786 fib level of 1303.75. That makes for a bearish gartley butterfly pattern. However, longer term charts remain bullish, so scalp opportunity initially.

Update at 10:20 EST: 1304.00 target hit; looking for higher still.

Update at 10:55 EST: 120min and 60min charts both say up. No sell signal as of yet. Looking for 1304.75 short term resistance to break and for test of 1307.75 high and possibly new highs for today. Note: 1307.75 is prior LIS and also .886 fib of move down; also we have possible 5 waves up as well. Good scalp opportunity to the downside, with limited risk. IF 5 waves, THEN look for abc into .618 (which in this case, is at 1301.00)

Update at 11:21 EST: Scratch that short; price action positive; and higher timeframe charts bullish. Note: 1305.00 is a .707 fib off the day session only chart.

Update at 11:31 EST: 1305.75 is a .786 fib level and possible 5 wave completion for another sell. It is also a perfect 1:1 price projection. The .786 makes for a bearish gartley butterfly. The last move up, (either wave 3 or 5) had wave extension.

Update at 11:58 EST: Price fallen back down through the 1304.75 LIS and currently sitting on small UTL. Right below is another small LIS and potential support at 1303.75. Butterfly targets: 1303, 1301.50, 1301.00, 1300.25, 1298.75 test, 1297.00, test of 1297.75 low, and then possibly lower.

Update at 12:13 EST: Short term support at the 1303.00 which is .382 fib level and 34ema off 8min chart. Possible wave 4 for higher? Watching lower timeframes carefully. Price action is positive.

Update at 12:28 EST: Price went back to test the UTL, and now needs to stay above 1303.75 for more upside. Now that we fallen through, it becomes a blue ice failure on the 6000V chart. if we cannot pop back up over the 34ema, it will create a JOT sell short against this blue ice failure pattern.

Update at 13:06 EST: 1301.50 target (the .618 fib level) hit. More downside is possible based on higher timeframe charts. 1301.00 target hit.

Update at 13:27 EST: 5 waves down into 1299.25. Retracement time. Then possibly lower. Most of butterfly targets hit. Trailing 1 car to see how far it goes.

Update at 13:47 EST: Market more bearish now. Re-testing the 1298.75 low. Expecting it to break, and going to re-test the 1297.75 level. IF that breaks, THEN we have further downside to come. 1298.00 is a .886 fib level (range 1296.75 low to1307.75 high).

Update at 14:12 EST: 1297.75 LIS broken - let's see if it will become resistance for more downside.

Update at 15:25 EST: 1297.75 LIS held as support. Upside momentum now. We also had a 3 wave down structure into the 1297.75 LIS. Looking for more upside now.

Update at 16:00 EST: Resistance is currently at the .618 here or 1303.00. Possible bull flag for higher. Otherwise this is a good sell short entry with little risk.