Let's take a look at where we came from and try to put some context on the situation. The following charts are profiles only (Thanks FT71). They sometimes clear the forest of trees and give one an easier view. All charts are RTH.
As one can see the ES has been trading in a range. A range that has had a couple of OMFG moments (at least for me it has) but a range none the less. The last few days have been one time framing up leading to a small break out. On Friday's push down a test of Thursday's single prints (Key LVN) led to a rejection and new highs. VPOC also trending up each day. If you were watching twitter you probably winced for the bears posting their 1000 lot $SPY long put trades...
VPOC of this range is 2095.50 and likely to be the main attractor if price pushes down back into consolidation and a great target if it does. I have NO IDEA if this will happen, however, if it does and the bulls don't step up to the plate then price is far more likely to continue auctioning down looking for buyers, which one would expect towards the lower end of the range.
Moving into a smaller time frame, let's look at some intraday charts for possible test areas
and a slightly more zoomed out view to show the trend line
Typically I would look for a test of that trend line, and knowing the ES a push through. Essentially 2103 to 2099 zone. Rejecting this area imo we are more likely to make new highs sooner rather than later. If price pushes through this area then 2095.50 MCVPOC is very likely and a decent target for some responsive action. Note the LVN at 2092 right below. Often where an auction will fail to continue and offers good risk reward if one has a bullish stance.
Below this level I'd be looking to see if the 2082 LVN gets tested, obviously there are areas in between that may reject it's just my opinion is that this is the next key LVN offering better risk/reward. News and price action rule though so...
If price does gain momentum to the downside the next critical area for bulls to defend is likely to be 2056.75 (visible in profile only chart). A key LVN and close enough to the bottom of the consolidation zone for bulls to really step up and defend. Given how the volatility has increased this year I don't think it would take too long to get there if this plays out.
So, some ideas on where to go long/short jotted down, however, what about the upside targets. I have none! Joke... 2140 is my initial target to the upside before I'd expect decent responsive action by sellers. This doesn't mean to say they won't step in before hand and ruin your day trade but overall I think this is the likely target (according other tweeps too) btw tweep = twitter peeps... Keep in mind the ES has a normal daily range of 8 - 16 points (1std deviation), I use those numbers as ideas on where to get out/look at getting out.
Hopefully some of this gels with your own hypothesis and aids in creating levels to trade. Watch your risk! When I don't it hurts.
