Monday, July 23, 2012

Let's Look At The E-minis /ES - A Technical Road Map

OK, so you will understand what I am seeing and why I call the numbers I have called with great success. This is a commentary on price movement only - nothing else.

Minis weekly - Ugly and confusing, but this chart is what it is and all the lines here are important. This chart is to go back in time and see where some of the numbers in play today originated. It is also to see what diagonals and formations lie in our future.

Note the beginning of the 1374 resistance we just experienced was the April 2011 top. Just below that is the 1341 level where in 2011 price struggled to rise. Looking down you find 1301 and 1265 levels that both played prominent roles recently. Bigger picture note the open gaps (gray) and support diagonals running up off of the 2008 lows (yellow, green, beige). The two important upper resistance diagonals are blue and "Big Red" off the 2007 highs.

Minis daily - Here we get into the heart of the move off the recent 1420 top. The futures form up so much better than cash. We have a clear green falling wedge off the 1420 top (EWT wave 1) to gap, long term support at 1263 and "Big Red" (the first resistance off the 2007 top that was broken). From there a blue rising wedge has formed. This blue wedge drove up to the pink resistance diagonal formed off the 1420 top and the 1375 resistance then reversed. Price is currently fighting this blue wedge support (EWT wave 2) and 1341 support.

Minis 4hr - Drilling down to the blue wedge. Here you can see the recent interaction with all the numbers and diagonals mentioned above. Bottom to top - Note "Big Red" and 1301 support. Blue wedge support and yellow (newest or lower developed wedge support being tested now). 1341, 1368. 1374 support resistance points. Pink resistance diagonal off the 1420 top. The point last week that cued me (and the STB board) to go ballistic on calling some sort of near term top was the occurrence of the double top shown here at 1375 in conjunction with price  meeting upper pink resistance.

Minis 30m - Drilled down to the final rising green wedge within the larger rising blue wedge over the past couple of weeks. Yo see the upper reversal off the pink resistance and 1375 level. Price has driven thru green wedge support. Price for the second time is challenging blue wedge support and testing lower yellow support. Price has violated 1341 support. Referring to the last chart above, note the massive hole between this lower yellow support diagonal and "Big Red", 1301 and the round level of 1300.

Minis 5m - Amazing how that gnarly fugly weekly chart above becomes crystal clear as we drill in. 

Right now it appears that the blue wedge has failed, but till this current yellow support goes, you can't be sure. Today's crack of 1341 is a big deal. The form of the recent fall looks very orderly. The one gap is a nice touch, but it appears that price is being walked down and there is no "fear" at work here just yet. Every day they come closer to failure. Friday I noted price closed at a critical level. It obviously failed and here we are challenging the next critical level (yellow support diagonal and 1333) after taking out 1341 support. If this goes is should be a quick trip to 1300 and then possible 1264.

Since before the 1420 top I've been looking to the 1220 (first target) and mainly 1170 (second target) for this fall. Other targets for this fall measure to the 1112 area. Monthly 200ma near 1150 is key support. The weekly 200ma is near 1140. Combine those two ma's and you get a pretty good support point for the next major fall. The setup is pretty nasty here is some scenarios, where in others (CPC or Bullish Percent) are not as dire or ready to turn.

Note that 1200 is critical not only as a psychological round level but it is the point where the last diagonal support off the 2008 lows. That is critical support.

I have not backed off my 1170 target and a plummet to induce enough fear or outrage to allow for more easing from the Fed. As for the "top" call - I'm 85% "the" top was set at 1420 but with the manipulation that exists, I simply can not call it at this time. Calling a top is not as easy as it was in '10 and '11. The game has changed. It is more rigged now than ever.

GL and GB!

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