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

ES #F 071706 "Are we there yet?"

The current resistance is at yesterday's high of 1300.25, which is a prior level of s/r or LIS. We have a nice gap down on overnite globex trading. The daily chart shows the market is overbought, and getting a little toppy. It looks that there are 5 waves up into the 1300.25 high. The 120min and 60min both indicate that the a retracement of the last move up is in progress. IF we have 5 waves up off from the 1231.00 low, THEN a bigger retracement is possible. Today's trading activity and range should provide a clue as to whether or not a s/t high has been put in at 1300.25 for now.

Lower timeframe charts currently look a little bearish. We are currently trading below the 34ema and the 89sma on both the 8min and the 6000V charts. The 30min chart shows the market to be right on the 34ema. Both the 60min and the 120min charts are still above their 34ema lines. So far this morning, we are trading just below the prior high of 1297.75. The 120min chart shows a potential sell signal trigger currently. IF 1295.75 breaks acts as a LIS, then more downside will probably follow.

Update at 10:25 EST: Double top for a quick sell short, as the 1300.25 held as resistance for now. Is this a wave 4 of smaller degree, or is this wave b of next degree corrective wave? On this move up from the 1295.50 morning low, we had 5 waves up. Usually, after 5 waves up, I can look for retracement of the move, with the usual target of .618 fib level. The real resistance level is 1299.00 -- we haven't been able to close above that level on the 30min chart. Can we manage to close above it this time around? The 120min looks like it could go either way, and the 60min chart is currently bullish right now. However, that 1299.00 LIS is in the way. Looks like market wants to try and test the morning lows first. If that meets with resistance (erh ... support), then the only way to go is up.

Update at 10:57 EST: And up we go to make a higher high. With this move up, we finally have a close above 1299.00. Onwards and upwards we go, as the higher timeframe charts are still bullish. Ooops, with this higher high into 1300.50, we have 5 waves, so expect a pullback here.

Update at 11:22 EST: Once price closed above 1299.00, we started going up to make higher highs; Upside targets are: 1304.00, 1306.00, 1307.25, 1309.25.

(Note to self: remember to look at the weekly chart pattern. We had not 1 but 2 buy signals screaming buy buy buy, cuz we r a goin' up).

Update at 12:25 EST: Small PRZ here -- 1303.00 is both a 1.618 and a 1.27 fib level; we have possible 5 waves up now into 1303.00 -- However, 60min and 120min still mightly bullish looking. Interesting note -- 1303.50 is a 2.618 fib level.

Update at 14:11 EST: We had 5 waves up into 1304.75. IF 5 waves complete, THEN look for abc retracement into .618 fib level of range of the 5 waves. Likely the high has been put in for the day; we have overbalanced and heading lower.

Update at 15:14 EST: Market retraced .786 of the 5 waves up. We have now made a retrace of the .618 of the move down; Could go higher to .707 to .886 fib levels before turning down again. Reason for thinking this is the 1) price action, which is kind of bullish and 2) the 8min chart, which tells me that while there is a buy signal off the 1297.50 low, there is no sell pattern just yet. Technically, we do have a bearish gartley butterfly pattern in place for the sell short trade at the 1302.00 or .618 fib level.

Any serious selling (if there are any) probably won't happen until tomorrow, after options expiration .... or .... the markets can do anything at anytime!

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

ES #F 081506

Market gapped up on 08:30 report, to 1285.75. Currently, we have 5 waves up off the 1262.50 low. The low yesterday was made at 1270.75, which is aa fib level of .707. Market is now overbought and getting toppy. IF we continue to go higher, THEN upside targets will be 1286.50, 1287.50, test of 1288.25 high, and 1290.25 to 1291 for now. But we have possible 5 waves also from 1270.75 low of yesterday. Divergence on 6000V chart says a sell short off the 1285.75 is a good low risk, high reward trade. Yesterday's high at 1283.25 is potential support and LIS. This needs to be broken and act as resistance before more downside is possible.

Update at 09:47 EST. Price action slightly bullish. let's see if we can go higher. We have a small double bottom off 1282.50 here for up. 8min chart has no buy signal as of yet though. Small 5 waves down off the 1285.75 high, so look for retracement and test of high again. Then looking for more downside activity.

Update at 10:09 EST: 60min has no sell pattern as of yet. So we probably go sideways for a bit.

Update at 10:52 EST: We made a higher high into 1287.00, which is a 1.27 fib extension. Sell entry against 1287.00 high for good risk/reward trade entry. Only problem is, we could be in a wave 4 for higher still. With a tight stop, we have a good entry for the trade, with a good risk/reward profile.

Update at 12:13 EST: we made a 3 wave pattern into re-test of low at 1284.00. IF this is a wave 4, THEN we should make a run for a higher high. However, the 1287.00 high needs to broken in order for this to happen. Be watchful for 5 wave diagonal triangles pattern in wave 5 positions and in wave B positions.

Update at 13:04 EST: Double top at 1287.00 for adding a JOT sell short.

Update at 13:22 EST: Market finds s/t support at YH (yesterday's high) of 1283.25, which is also a .618 fib level. Unless the 1287.00 gets broken to the upside, we have possibility of further downside activity.

Update at 13:34 EST: Buy signal off the 6000V chart for a move to test the high at 1287.00. Market is slightly bullish. Higher high is still possible for now. Targets are: 1288.00 region, then 1290ish if market very bullish. Is this going to be a complex flat type of pattern? Will we make an abc move up and then fall back hard? Watching lower timeframe charts carefully. 30min chart remains bearish for now. If bullish, one can buy against the 1283.00 low and place stop just below that level. If bearish, one can sell against the 1287.00 high with a tight stop just above that. In other words, we have been stuck in a relatively narrow trading range all day. One thing to keep in mind right now is the fact that we are trading above both YH and OP. IF OP breaks again, THEN we should go lower.

Update at 13:46 EST: Price action bearish. Looking for OP to break and for market to go lower.

Update at 14:24 EST: Price action bullish, looking for higher high now. 1287.50 target hit.

ES #F 081406 Potential Reversal Zone

The Daily chart is at PRZ (potential reversal zone) -- 1.27 fib target, .50% fib target, at the DTL (down trendline) on 120min chart, and also we have a 1:1 fib projection. Let's see if 1280.00 is the high for the day or not. The daily chart is slightly bullish still. The 120min and 60min have sell patterns about to trigger. Current LIS is 1277.00. IF 1277.00 does not hold, THEN I will be looking for weakness and a sell pattern to sell short.

Update at 09:39 EST: Downside targets: 1275.50, gap fill at 1272.25, 1271.25, 1270.00 and possibly lower. However, 1277.00 needs to break and become LIS before we can see lower.

Update at 10:20 EST: Target 1 at 1275.50 hit. No buy signal yet off 60min chart. Looking for eventual lower lows.

Update at 10:44 EST: 1277.00 LIS now. Look for lower as possible.

Update at 11:06 EST: We have a 3 wave pattern down into 1275.50 low, and now we made another 3 wave pattern test of 1280.00 top. So much for lower lows for today; Upside targets are : 1280.75, 1282.75, 1284.25, 1285.25., 1287.25. to 1290.25.

$DXC Chart Analysis 081306

The daily chart for the USD index shows current support at the $84.39 level. We have had 5 waves up into $87.33 high. This is followed by an abc 3 wave pattern into a .786 fib level. Looking for possible upside targets of: $86.20, $86.46, $86.69, test of $87.32 and possible $88.11ish. Will watch weekly trading activity to gauge potential upside targets being hit.