The bulls appear to be winning every technical battle heading into month end, reports Ricky Wen.
Tuesday’s session played out as a gap up and crap day where the overnight gains could not be sustained after price action swiftly backtested into our key E-mini S&P support levels of 2885/2875/2869/2850.
If you recall, 2850 has been the most-hold level for the short-term term since Monday’s revisit back into the 2885 range high of the prior two weeks resistance. Overall, it was just an initial trend session playbook that turned into a rangebound session as the price action inches closer and closer towards our immediate upside targets.
The main takeaway is that bears again fumbled an immediate downside continuation setup, and bulls now have the ball and everything favors the prevailing trend given the past few weeks’ context and structure.
The billion dollar question for this week has been: Could bulls score in a big way by breaking above the 2875/2885 range high resistance levels and squeezing into 2930 and beyond? As of Tuesday’s, close, it was still an inside week, with the range getting tighter and tighter.
Price action is now showcasing an ongoing breakout above 2875/2885 levels nearing the first target of 2930. The battleground is crystal clear as we head into the April month end closing print. Bulls want dead highs closing and bears want a swift rejection playbook setup.
The bulls remain in full control so the gummy bears have to show up and prove that they are real again. Based on current odds and our previous discussion during yesterday’s intraday, it may be wise for any bear attempts to step aside until month end completes as the bull train is going into its destination. Either way, there’s likely going to be a big price reaction soon due to the confluence of levels within the same area.
What’s next?
Tuesday closed at 2860.5 around the lows of the session as a rangebound day showcasing a doji. As of writing, we already know which side keeps on winning as numerous attempts of the 2850 breakdown resulted in miserable failures for the bears, so the bulls are pushing hard into month end and beyond (see chart below). Tuesday’s entire session was just a feedback loop squeeze setup and it played out in the overnight futures market.
Our game plan highlights:
- Our four-hour white line projection remains king for now as price action has confirmed the higher lows and higher highs breakout and trending towards our pre-determined targets of 2930/2975.
- Short-term remains bullish; 2850 key support was stick saved once again during Tuesday’s session. If you recall, there were numerous intraday attempts trying to break below 2850, but ultimately the gummy bears were no match for the ongoing bull train slaughter spree.
- Thursday is month end print and it’s obvious now that the bulls continue to be in full control and it’s clear where each side’s goal line for the April month end closing. Bulls looking to close around the dead highs of the month vs. bears looking to reject swiftly vs key resistances and show some selling pressure to attempt to re-gain control of the price action
- We are on hold for our intermediate bearish bias until there’s a decisive breakdown below 2752, followed by 2717 indicating immediate momentum aligns with intermediate timeframes. Know your timeframes!
Ricky Wen is an analyst at ElliottWaveTrader.net, where he hosts the ES Trade Alerts premium subscription service.
