Wed, March 2

After failing a daily bearish setup on Monday the market turned around and failed a daily bullish setup on Tuesday. It looks like the bears could have another opportunity to sell the market. Its important to note, however, that the larger daily setup at 1302.5 has yet to fail which means the level could continue to support the market. Without a decisive failure of that setup it would be hard for anyone to step in front of this market and sell it short. Also, until the long fails, there is still an upside target of 1362. Nonetheless, it will still be interesting to see if there are sellers at the 1316.5 level.

Thurs, Feb 24

The series of 15 minute measured moves short continued today and put pressure on the daily 50% level at 1302.5. Technically, since the low of the session was 1292.5, the 1302.5 long setup has not failed. As of now the market is stuck between the last 15 minute short setup and the daily long setup. Once the 15 minute moves short fail we should see a rally into the the bear's first daily short opportunity in weeks at 1317.75. If there are sellers at the 1317.75 level, we could go lower to the 1280 target but typically it would take a failure of the long to see real sellers.

Wed, Feb 23

The market sold off again on wednesday, but did so before rallying into its first daily bearish setup in a couple weeks. The 1302-1300s provided support for the market, but if that setup fails its 61.8% level at 1293s (which is under pressure this morning), there could be deeper pullbacks. The bears have been aggressively taking us lower on the 15 minute time frame, so the opportunity on a daily time frame has yet to come. After finding some support at 50% long at 1302.5, it would take the failure of that long for the bears to have a shot on the daily time frame (which fails at 1293). If that happens, there's a potential short setup on the daily time frame drawn from 1343s to 1293ish where the long setup fails (again, if it fails). Its possible we continue lower on the 15 minute time frame and don't see a rally into that daily setup.

Tues, Feb 22

The /ES failed a daily extension long on Monday putting the pressure on the bulls. The next support for the bulls would be a full 50% retracement long at the 1302.5 level drawn from the 1262.25 lows to the 1343 highs. Bears will be watching the 1326.5s as a potential short entry on the daily time frame. If the bulls find support at 1302.5 before a retracement into the bearish setup at 1326.5 (which at that point would be 1322.75), I would apprehensive about the bearish setup. If the bears can get it done at this setup, we could potentially see deeper retracements.

Monday, Feb 14

The market bounced of a third 15 minute long setup in a row and made new highs on Monday. The 1325.50 level has a 1333 target but before getting there the /ES pulled back and found support at the same 1325.5 level in the extended session. If the bulls fail on the 15 minute time frame we could see a pullback to the 15 minute 50% retracement at the 1320 level before finding support.

Friday, Feb 11

The 1311 daily level discussed below provided support again for the market on Friday. Unlike Thursday's move, however, Friday's move off of the daily level was followed by a series of 15 minute measured move longs. The 1327.50 daily target was then hit in the afternoon. The next full 50% daily retracement level at 1318.50, drawn from 1308.5 lows to 1328.75 highs, has a 1333.5 target. If the market does not give much of a pullback, look for what will be the third extension long (drawn from 1322.25 highs to new highs).

Thurs, Feb 10

The market found support at yet another daily 50% extension long at 1311 drawn from the highs at 1299.50s to the new highs at 1322.25. The bulls then filled the gap and put a squeeze on the shorts from the premarket session. The target on the daily extension long suggests we grind higher to 1327.75. It's important to note that after finding support at the daily 50% extension long the bulls then failed their first long setup on a 15 minute time frame, showing some weakness in the move off the 1311 level. From here we should look for the bears to sell their first 15 minute short setup in order to put some pressure on the longs that found support at today's daily 50% extension long. If the bears can get it done and the daily extension long fails its possible we actually see a pullback into the full 50% daily long at 1292.5.
If they cant get it done, which seems very likely in this QE2 market, the next stop is 1327.75.

Wed, Feb 9

After four days of gains the bulls showed some weakness and failed a 15 min. setup today at 1317.54. This gave the bears their opportunity to sell a 15 min setup but they couldn't get it done. With the possibility of a wedge forming at highs here its a wait and see situation. A break to the downside could lead to a pullback into the next full 50% daily move long at 1292.5 (see below).

Tues, Feb 8

The market has yet to pullback into its next daily 50% measured move long at 1291.5. In order to see such a pullback, the bulls have to fail on the 15 min time frame. That will give the bears the opportunity to sell the first setup immediately after the bulls fail. If the bulls continue to buy each and every setup, as they have in the past two days, its possible we never see a full pullback into the 1292.5 retracement. Instead, as the next move long, we'd look for another extension long drawn from recent highs at 1299.5 to the new highs. Its important to note that since the market continued higher on Tuesday, the next full 50% daily retracement is now 1292.5. Because new highs were formed the fib should be redrawn to those new highs.

Mon, Feb 7

The last 50% extension long hit its target on Monday. The next setup is drawn from the lows at 1262.25 to the new highs at 1320. This suggests a pullback to 1291.50 before continuing higher to the -23.6% target of 1333.50. If the market does not pullback, but instead continues to tear higher, look to draw another extensions from 1299.5 highs to new highs. If the bulls do not buy their setup look for the next bearish setup.