Hey friends, posting some thoughts about today's price action and what I'm looking for next on ES_F:
As you know from my Market Prep I started the week without a directional bias, but I'm becoming increasingly bullish after watching today's price action. I sound like a broken record about 3760 but I truly think that is the most critical level on ES right now. The inability of the sellers to push today's Opening Range Low and meaningfully break through 3750 was very telling: This market wants to move and if one side can't get the job done the other seems eager to step in and dominate.
After watching the battle at 3750 I told myself I'd join the long side on any movement above 3760, which is not a trade setup I normally take...hence the reason for calling it out on Twitter. I rarely initiate inside of value for the day, but it became painfully obvious the sellers were running out of ammo, which typically backfires on them (apologies for mixing puns).
The best part about today's bullish price action is that we're still under my Weekly Pivot of 3834, so even if you didn't catch today's OR High Breakout or the dicey OR Low to Mid trade there's still a strong chance for more upside this week in my opinion. If ES can get over the pivot then you have to be looking at the 20DMA as the next logical target.
If we zoom out a bit we can see a better view: Not only did the buyers hold the Balance Zone, but they pushed us back above it, approaching my Pivot. Now, keep in mind there was a very aggressive seller at 3825, which could make getting over 3834 challenging, especially considering how far & fast ES moved up today. Pullbacks wouldn't concern me as long as 3800-3805 holds. If we get upside continuation above my Weekly Pivot I think 3896 (bottom of another Balance Zone) would be the next point of resistance.
What I'll be looking for now is the aggressiveness of the buyers should we reach these key levels, e.g. do they blow right through the 20DMA or fight with it? Will they blast past 3834 or fight with it? Will they have trouble at 3896 or blast through it to 3942? This will help give me a sense of the market's appetite for risk. There's a difference between controlled buying (an upward drift) and aggressive buying...the latter usually indicating the larger participants don't care about our little levels and they just want IN NOW. Velocity matters, keep it in the back of your mind...there's more to watch than just levels.
I think we have a lot more exciting trading ahead of us this week, ignore the noise and stay focused!
Happy Trading,
Horse