ES: Bulls Will Get a Chance After Test of 3,700-3,600 Support

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$ES #ES-mini futures #trading setup

ES continues to consolidate in a 120 point range (3,920 – 3,800). That triangle shaped consolidation looks like a bearish pennant on a daily chart:

ES-mini Daily chart

The next strong support is the Green Band located in between of 3,700 and 3,600. A drop to that green band would most likely be followed by a strong bounce.

Bulls expect that test of 3,700 would become the second divergent higher high and will be followed by a strong short covering rally, a five wave up move that would push price over the high made in Dec 22. Bulls watch here a developing decline that resembles a right shoulder in a bullish reversal Inverse Head and Shoulders structure.

Bears expect only a minor a-b-c whipsaw consolidation in subwave (b) up within a range 3,900-3,700 (shown on the chart above).

In conclusion, the destiny of the market will be defined by strength and structure of a bullish bounce off the green demand zone 3,700-3,600.

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