Hey Traders,

ES remains in what could be a wedge or a box, at either rate this is a zone of vicious chop and whipsaw that has had traders frustrated, the only positive development is that 200dma is now below the rally highs and declining at about 2 ES pts/day and should help this mess resolve shall we hover around here for much longer. 50ema is now also at 23.6% retracement of the whole rally and quickly approaching key 872 level.

Hopefully these ma’s closing in on each other at about 4ES pts/day will help this range resolve.

Today was 3rd highest volume day in May, likely to do with end of the month.

As mentioned all week, if you do choose to day trade this whipsaw, best probability trade remains ambush / 50% retracement zone trade, which worked rather nicely today. Considering we are now in the top of the range will be looking for retracement from today’s low:

if 908.75 level holds that ambush zone starts at 897.50.

Also there is a possibility that we made a head and shoulders bottom today, that has a target of 916-917 area, or top of the purple channel:

Another expected resistance levels is weekly R1 and Wednesday’s high at 914.

Please remember that we are in the range of chop for a month now, I would expect this range to resolve in 3 weeks at the very latest , which oh just happens to be OPEX week and when the two previously mentioned ma’s will meet. The direction in which this range will resolve should result in at least a 50 point move, until then have to trade this market with extreme caution or look towards other markets.

Cheers

Vlad

Update Cash Close:
Closed within ticks of the middle of the range which happens to be 902.5. Another day to drive both bulls and bears crazy with this tape, luckily there were some set ups that worked out reasonably well as well as some decent scalping opportunities.

One promising thing is that 200dma and 50ema are now within the range and will help this market make a decision shall we stall in this range for too much longer.

If you are not doing so yet, feel free to FOLLOW ESEC FUTURES ANALYSIS ON TWITTER, even if you don’t go on twitter, still follow me, it will make me feel warm and fuzzy inside :-P

Have a great rest of the day and check back for daily updates later on

Cheers

Vlad

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Update 3pm EST:
On the updside no resistance until 914 weekly R1 and high of yesterday, on the downside watching daily ambush zone which happens to line up with a trendline (if 908.75 level holds) 50% line is at 897.5

last hour of amazingly exciting day is here… we are OBVIOUSLY… in two parallel channels

… just kidding on that one, even though price does seem to react pretty well to the levels on those parallel channels on 2500tick chart
Update 2:06pm EST:

No new developments in the markets, all continue to trade via random generator method.
One thing worth noting is that 200dma on ES is now below the rally high.

Update 1:16 pm EST:
Ambush zone from yesterday’s highs violated. No clear set ups at the moment. Waiting for more price action to develop. Yesterdays high and weekly R1 at 914 with trendline right below there in 909s:

This whipsaw besides making me almost throw up my lunch gives plenty of room for imagination of head and shoulders patterns, with current inverse one possibly breaking out with target around 918.

Update 12:28 pm EST:
Shorting ambush zone from yesterdays highs has turned into quiet a fun exercise. Awaiting more price action instructions from Mr Market now and trailing the short.Keeping an eye on reaction at 894 as ambush from daily lows on the way down. Remember that we are in a box of vicious chop, so it pays to consider bigger set ups only, getting cute with smaller set ups can be really painful in current market conditions.

Gold has made a new multi-month high and euro has also been rallying on dollar weakness.

Update 10:57am EST:
Ambush held perfectly bouncing for over 14 es points. Now (considering 886.25 low holds) that same ambush is at 900, with daily 50% retracement / ambush zone at 894.25 to watch for further direction clues.

Good Morning Traders,

no key technical developments overnight, watching ES 900.5 ambush zone for further direction, remember that we are in the box of chop so ambushes are a little less significant. Check back for more updates as price action develops

Good Trading to all

Vlad