ES #F 092606 The Bulls Have It

Market found support overnite at 1333.50. Charts currently look bullish. Expect that a new high is possible either today or by end of the week. 30 year bonds are rising, which means long term interest rates are falling.

Update at 09:01 EST: We could be stuck in this current range for a bit before we move higher (range high of 1340.00 and range low of 1321.00. Watching lower timeframe charts for early clue to direction. Lower timeframe charts currently show resistance at 1337.25 for a possible pullback here. A sell short is the first trade pattern of the morning that I see off both the 8min and 6000V chart at this time. IF the GL holds, THEN we can expect more upside to come.

Update at 09:37 EST: support at a small .618 fib of 1335.00 for bounce back up to test GH. This gives us an opportunity to take a JOT sell short trade, if one believes that the trend is down. However, a better sell short would be at the .618 fib to .786 fib ( higher at 1337.50 and 1338.50 ish)

Update at 09:40 EST: the small bullish gartley butterfly off 1335.00 was a good long entry JOT if one believed that the trend will be up.

Update at 09:58 EST: OP now as supportfor higher.

Update at 10:03 EST: Upside targets hit; expect higher highs eventually.

Update at 10:32 EST: Sell short entry now against 1343.25. I count 5 waves up into that level. IF we have 5 waves complete, THEN look for an abc correction into the .618 fib -- in this case, the initial downside target is 1337.25 (GL). The key is for yesterday's high, and important LIS of 1340.00 to be broken and become resistance before we can see more down.

Update at 10:55 EST: 1340.00 LIS is now support again for a run to test the high. The low at 1339.25 is now support and a good entry JOT long to test the high and possibly higher. Bears can use the run back up to enter sell short. Higher timeframe charts remain bullish, so we will either range, or go up.

Update at 11:14 EST: Sell short against first test of 1343.25 high is low risk entry for a scalp if nothing else. .786 fib tgt is 1340.00, which happens to be an important LIS. Need this to break to get to the eventual .618 fib target of 1337.25.

Update at 12:01 EST: 5 waves down into 1337.75, which is a 1.414 fib level. Expect retrace now of the 5 waves down. So far, we have had an abc 3 wave pattern (wave c has 5 waves) into 1337.75 support. This is a possible wave 4 for higher highs. 120min chart remains very bullish. Upside target(s): 1344.25, 1344.75, 1345.00ish, 1345.50, 1346.50ish.

Update at 12:31 EST: Sell pattern in place on both 8min and 6000V chart against 1342.75 high now. Cannot ignore the confluence of signals. The only question is ... how far will the pullback be ... very shallow, or very deep? Sell short until one sees a buy signal in place. Price action indicates bullishness, and 120min chart indicates lots of upside momentum need to be dissipated before markets can go down. Mixed signals, so probably range for a bit; this makes for good scalping opportunities.

Update at 12:48 EST: price action much more bearish now. Looking for re-test pf 1337.75 and lower now. Long topping tails off the 60min chart. Also I have a sell patterns either already triggered or getting ready to trigger with more downward move in price.

Update at 13:00 EST: Support off the .707 fib level of 1339.25, and 5 waves down into it - so expect some kind of retracement back to the .618 fib of small move down. .618 fib tgt hit. Mixed signals means it can go either way. Wave 4 in place -- is the abc wave 4 complete, and we continue up, or do we continue to extend? 120min and 60min continue to be bullish.

Update at 13:22 EST: Up it it..... looking for higher highs now, even it is just by 1 tick.

Update at 13:35 EST: Quick sell short against double top good for a scalp. We had abc 3 waves into the double top for a fast pullback. Could be wave B, so fast move down would be wave C. Both 8min and 6000V chart in position for sell.

Update at 13:48 EST: Support for further upside.

Update at 14:07 EST: 1344.75 is a 1.27 fib tgt. Still bullish; pullback possible wave 4, for 1 more higher high around the 1345.00 to 1346.00 ish.

Update at 14:35 EST: 5 waves up into 1.27 fib tgt of 1345.00 to 1345.25. Sell short with tight stop. Downside tgt will be the .618 of the last 5 waves up, or 1340.75 ish. Higher timeframe charts remain bullish, so we could have wave extension taking the market up higher; tight stop in place for the sell short. Upside tgts all the way up to 1358ish. Both 120min and 60min remain very bullish. A higher high is likely.