Chart Chatter: $ES

Welcome to Chart Chatter where we discuss various technical charts we find of interest. We cover indices, signals and stocks on different timeframes highlighting different technical techniques we use over time. We’ll focus on key observations we find relevant which readers may find of use for their own trading.

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Similar to $NDX we have a bullish descending wedge pattern on $ES/$SPX.

I’ve outlined this chart below in this weekend’s market report “Positives“:

The Monday flush brought new lows, into the .382 fib I had outlined as risk and reaching Mella’s 2,600 target:

That dip left the structure intact as I had outlined:

Unlike $NDX $ES has already broken above its descending trend line and has reached deeper toward the target zone and has tagged its .382 fib today which also proved as resistance for now.

The pink box in the chart outlines the expected pattern price target zone. Due to the steep price advance so far a retrace or even a retest of the pattern would not surprise, but $ES needs to hold above 2684 on any retest to defend the validity of the pattern.

I’ll post updates to this chart in this post as it evolves in the days ahead.

November 6 Update:

$ES has tagged the 200MA on one attempt and is now back into the lower target zone ahead of the mid term election today:

Price has been holding up above the daily 5EMA. It’s safe to say that the election will likely impact the initial next larger price move. On a bullish outcome bulls will want to reconquer that 200MA and start tackling the higher target zone.

A perceived bearish outcome will likely at least test the 2684 zone as there is an open gap on $SPX. Again this is an area bulls must hold or face a retest or potential new lows.

Or, if the 2016 election is any guide, we may even see both price zones tested in one night. 😉

Stay tuned.

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