ES broke into this bigger time frame Resistance are back in June, all the shorts who were looking for market crash or reversal got trapped below and became our Support.
Cost Basis was built on top of that in 4460-4375 range, once we ran the Stops over 4487 that provided the buying to get us towards the top for this Resistance at 4666-4570 but once we got inside we went sideways in a tighter distribution range instead of getting follow through.
In last weeks Weekly prep we knew that we needed to get over 4615-10 area and hold to see continuation higher from here and if not the buying up here was mostly momentum buying and if we start breaking lower stops we can continue lower back towards our Cost Basis areas.
08.01 We got that rejection from 4615-10 and opened on the gap under temp Support which meant the bid that held us up over 4590 on Tuesday was gone. Once we broke that structure and closed under we trapped buyers as supply.
What can we look forward to now? Well on bigger scale in my opinion we are in a bigger time frame distribution range, and the goal is to sell product at higher prices to the trapped shorts until market cleans up and decides on direction out of here. This might take some time to clean up as we had a big party getting back up here.
UNLESS Market gets under 4375-4290 area and holds under or gets over 4570-4666 and holds then we will balance in this range and do cleaning.
This broken structure now becomes our supply, we have Short Stops around 4530-50-60-70 areas but also Supply is right above it so they look pretty strong for now, our lower Support stops on the other hand don't look so strong because we have been away for some time.
If market takes out this 4590-80 area we could see continuation for more stops lower.
Going forward we can trade this range from area to area, unless we get a bigger change of direction and visible Structure breaks. If we stay in this range once we find Support trading might not be easy as we could get more choppy days and two way trading without much follow through because now we have Supply and most likely still have buying as well.
Unless we sell off hard here and break all the lower stops or bounce back over 4520 then we might see market consolidate around 4370-4500 area, holding under 4520-40 will mean continued weakness and I would think this can bring a test of 4300-4290-60 at some point by October. But we focus and gather new market generated information every day and update the outlook as anything can happen.