ES #F 092506 Month End and Quarter End Week

We have what looks to be 5 waves down into support at 1321.00, so I will be looking for a possible abc retracement pattern into the .618 of the range ( 1332.75). We have gapped up overnite. Currently, 1330.50 is resistance and it is a .500 fib retracement. Possible 5 waves up into this area. Sell short with 1 pt stop for limited risk. Slightly higher risk trade shorting from here, rather than waiting for the .618 fib target to be hit first. Downside target(s) would be the gap at 1326.00 and then lower. It is also possible that we are in a bigger wave 4, and if this is the case, we could be stuck in the current range for a bit before we see any movement.

Update at 09:15: Sell against the 1330.50 high was good for a scalp. If trading multiples, can hold runner(s) for the downside targets.

Update at 09:58 EST: 1327.00 current short term support - it is a .382 fib level and a .50 fib level for a small PRZ. Expect lower after some profit taking. Key level is to watch is the LIS at 1316.75.

Update at 10:00 EST: Gap closed. Next downside target(s): 1324.75, 1323.75, 1322.00 ish, test of 1321.00, and then possibly lower. Currently, 1325.75 is both a .50 fib and a .707 fib for a small PRZ. No buy signal yet off 60min chart.

Update at 10:39 EST: short term support at the .886 fib level of 1322.25. No buy signal in sight.

Update at 10:52 EST: 5 waves down into test of Friday's low at 1321.00. Expect some kind of retracement with profit-taking from short sellers, and potential buyers. Potential wave 4 consolidation/congestion before lower low to complete wave 5. Alternate wave count is that we are in a bigger wave 4 for higher.... so watching carefully.

Update at 11:11 EST: small 5 waves up into .50 fib or 1325.75 for profit-taking if long, and JOT sell short entry, if one believes in lower lows. Only concern is the 8min chart still says more upside to come. Possible upside target is still the .618 to .786 fib levels of 1332.75 and 1336.00 ish.

Update at 11:24 EST: 3 waves up into resistance. Watch for sell pattern. We have an abc 3 waves up into .707 fib.

Update at 12:06 EST: short term support off another .707 fib level. Continue to have mixed signals, so more dangerous to enter a trade. More upside is possible.

Update at 12:30 Confirmed buy signals of higher timeframe charts. Upside target(s) are: 1332.75 to 13360.00 ish as commented on above.

Update at 12:57 EST: Conservative target of 1332.75 hit; 13330.00 is a 1.27 fib for possible profit taking and deeper pullback; market has overbalanced, and so it is looking like a big wave 4 for higher highs eventually. 1334.75 resistance is at at .707 fib level, 1.27 and a 1.618 fib level for a stronger PRZ for pullback. This makes for a big bearish gartley butterfly pattern.

Update at 13:40 EST: IF this is a bearish gartley butterfly, THEN downside tgts to shoot for are: 1327.75, 1325.75, test of the 1321.00 low, and then the all important LIS of 1316.75. IF we find support here at the 1332.00 LIS, then look for test of top and possibly higher to 1336.00 ish target.

Update at 14:13 EST: 1336.00 ish tgt hit. Now we have 5 waves up into 1336.50. No sell in sight off higher timeframe charts. Since we have overbalanced, a higher high is likely.

Update at 15:22 EST: Double top at 1340.00; Daily session only now has 5 waves up into 1340.00. Sell short with tight stop just above the high of 1340.00 makes for a low risk entry. However, upside tgts could go as high as 1345.00 ish. Watching carefully. Sell short good for a scalp anyways. Trade 2 contracts, and exit 1 contract for 1 point -- then the worse that can happen now is a b/e trade if the last contract gets stopped out.