Last week I tried to get long ES two different times. Here’s a look at the last time:
The “shakeout” represents one reason why trading is so difficult. I hadn’t been paying attention to the swing tick charts but you can see how the area where I got long had blue & magenta professional activity while the shakeout had yellow & white bars showing a lack of professional activity. From then ES stayed in its balance area and then the overnight Gap up over resistance played out. This is a repeating pattern and it’s one to keep in mind. I have to admit I could have been more observant on that and stayed in through the shakeout, or at least re-entered after getting stopped out. But I let my guard down and missed 10 pts and possibly more.
We’re now within striking range of the previous top around 1207. I don’t see any reason why we won’t test that. I had expected a correction before we do but we’re so close I think it’s totally possible we hit it and then correct. This will be a huge trade and I’ll be looking to get short with a full position.
Adding to the bearishness is the fact that the large contract commercials are continuing to fade the move up. They’re going short as a hedge to protect their gains.
As I’m writing this we’re at 88 and only 19 pts off the previous top at 1207 (adjusted for rollovers). Longs should be extra cautious if we make it to the prior top.