$ES: The Weekly Support Got Broken. Can Bulls Repair the Damage?

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$ES #reversal #breakdown

The sharp drop we got on Thursday and Friday last week made serios damage to the bulls’ army.

The weekly trend was turned down.

Note that the overnight bounce popped back up to the broken weekly support 6,307.75.

As long as bears hold ES-mini under that level any immediate bullish scenario remains a low probability alternative wave count for me.

In my Friday update I showed you a strong monthly support at 6,227. ES has almost hit that level on Friday.

But that was the monthly support for July. Today will be the second full trading day of a new month. That means the Monthly Opening range is still being formed. We will get the new monthly resistance and support formed tomorrow by 4.00 PM EST. Most likely, the Monthly Resistance for August will be 6,365.50 (the high made on Friday).

So far the lowest low made in August was made at 6,239.50.

Use my Month Opening Range indicator to calculate and chart those levels.

  1. The Bullish Scenario.

Bulls may try to count the sharp drop as a corrective wave ( iv ) down:

ES-mini 120 min chart

In my Friday report I noted that that bullish setup is low probability scenario:

If bulls manage to hold ES over 6,307 and then turn it up and break back over 6,368, then we can expect another extension of the rally in a wave ( v ) up targeting at least 6,600.

My Impulse Master Indicator nailed the top last week and it detected the Demand Zone that stopped the drop on Friday:

ES-mini chart posted at 10-20 AM on Friday.

This is how that chart looked like at 9-15 PM on Sunday:

And this is how it looks like now:

However, if I apply my Impulse Master indicator to ES-mini chart of 15 min I can see that the overnight move up just pushed price up against the decaling red trend channel:

To turn the trend back up we need price not only to break over the red trend channel on 15 min chart, but also a buyable pullback when price comes back down to re-test the broken red-channel from above.

In conclusion:

Bulls have a chance to start a new leg up but they need to break back over the broken weekly resistance 6,307.75.

Failure at this resistance would most likely trigger another wave of selling.

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