ES Short

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It looks like it is time to go SHORT E-mini S&P500 Futures…

Our PRICE EXTENSION ANALYSIS model below shows how far a price retracement (uptrend) can go on each time period, based on the statistical analysis of all the historical retracement patterns that share similarities with the current retracement pattern.

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The DAILY time period offers strong resistance at the 2134 level (highlighted below): 88.89% of the events recorded in history are scenarios where the market does not go higher than this level during this type of retracement pattern. If this level is reached the odds are good to see a new DAILY (short-term) pullback/reversal from here, but in fact they are already good from 2112.00 (77.30%), this level was reached yesterday.

The WEEKLY time period offers good resistance at the 2122.25 level (highlighted below, best match for the DAILY level): 66.67% of the events recorded in history are scenarios where the market does not go higher than this level during this type of retracement pattern. This resistance starts to be good enough to make a WEEKLY reversal possible.

The MONTHLY time period offers good resistance at the 2140.75 level (highlighted below, best match for the DAILY/WEEKLY levels): 46.15% of the events recorded in history are scenarios where the market does not go higher than this level during this type of retracement pattern. This level starts to offer some resistance to the long-term advance but we would not call it “overbought” (yet).

The big gauge on the right hand side of the table below shows that 67.24% of the DAILY+WEEKLY+MONTHLY (combined) cases recorded in history are scenarios where the market does not go higher than these levels during this type of retracement pattern. This setup means that from these levels a reversal is possible. Short-term traders can use it to play SHORT trades, while long-term asset allocators should avoid adding LONG positions at these levels, consider short-term hedging if active management is your style.