Although sellers finally hit, and then pulped, the recalcitrant 4245 target, I’ve used a visually obvious and conservative ‘reverse’ pattern (inset) to project at least moderate additional downside over the near term to D=4129.26. The pattern looks enticing for ‘mechanical’ shorting on the way down, but p2=4178.81 would be a worthwhile spot nonetheless to attempt scalping what could prove to be a fleetingly tradeable low. If the HP levels give way easily, however, suggesting the correction will be nastier than some might expect, we’ll shift our sights to this larger rABC, where D=3775.50. That would be a major breakdown, but you still shouldn’t pass up a chance to play for a bounce, even if ‘against the box’ with options, at p=4051.50. That well-hidden support would become my minimum downside projection if 4129.26 gives way easily. ______ UPDATE (Aug 22, 8:54 p.m.): The futures plunged to within an ansgstrom of the 4129.26 target I’d flagged as my minimum. What’s next? Reply hazy, try again later. _______ UPDATE (Aug 24, 6:56 p.m.): Here’s a modest rally target at 4189.25 you can use for now. Notice how Mr Market cheated ‘mechanical’ bids at the green line out of an easy winner. Don’t expect more kindness if the trade sets up a second time. ______ UPDATE (Aug 25, 11:02): ES is moving with high predictability, having topped in the dead of night just beneath my 4189.25 target. Then, as expected of Mr Market, following a sharp pullback from the ‘mechanical’-trade sweet spot, ES trampolined from a few points above x to deny easy entry for a second time. It doesn’t know we are there, it just comes naturally.
ESU22 – Sep E-Mini S&P (Last:4173.00)
