Shorter posts than usual for the rest of this week as I have a lot of offline stuff to do. Just four charts today but then the position today looks reasonably simple. ES is building up strength for a decent move one way or the other. Will that move be up or down? I'm leaning short but it might yet go the other way.
On the upside ES has not yet touched declining resistance from the July highs, though it can within three points of doing so yesterday. That looks a bit like unfinished business overhead and we might see a touch of that in the 1269 area today. A move over 1270 would suggest that we might be starting another move higher:
There's unfinished business on the downside as well however. I've been watching the rising support trendline from the low for the last few days, as it is the obvious first target for any retracement. That rising support trendline is now over 1240 and I'd expect it to be hit before any move up. You can see from my 15min chart that if we see that trendline hit today then we should also see a little H&S completed with a target in the 1225 area. If we do see that rising support trendline hit that is a model long entry of course. Only once it breaks does it become an interesting short entry:
30yr Treasury futures look ready to break either way this morning, with a possible little IHS in play if ZB can break declining resistance. that IHS would target the 144 area which would fit with a decent retracement on ES:
EURUSD was knocked out of the little rising channel on the S&P downgrade news yesterday. It is now just below the important S/R level at 1.343 and if we are going to see a test of the lows on EURUSD, this is the obvious opportunity to see that:
In summary ES has declining resistance overhead in the 1269 area, and rising support from the last low is now at 1242 and rising fast. Rising support is rising at about 16 points per day so we are going to see a breakout one way or the other within 36 hours at the most.
