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.