ORIGINAL POST 2:20 AM
ES just reached the .618 Fib retracement (of the 1705-1624 drop) at the bottom of the red channel. I’ll go long here at 1676 on the assumption that the channel and Fib will hold. Stops at 1666ish.
Rising red channel or purple? We’ll know soon enough by whether ES can climb back above 1680.48.
The red IH&S neckline held its recent test, and we have two higher highs and higher lows so far. I’d be more confident in the pair’s upside if it could break through the purple midline. But, the yellow channel could tack on quite a few percent without its help.
UPDATE: 10:29 AM
Getting a little sell off following the crummy consumer sentiment numbers. Retraced .886 of the rise from 1674 to 1682, should hold here — stops at 1673ish.
Re SPX, as long as 1681.96 holds, next stop should be 1692.08 — the .786 retrace of the drop from 1709 and the 1.272 of a well-formed Butterfly Pattern set up since yesterday.
I have to run out for an appointment. I wouldn’t hold long over the weekend, but I would definitely hold long on any move through ES 1682.25 with an intial target of ES 1684 and ultimately 1686. I would short on any weakness upon reaching those targets, but I suspect it will occur in the last few minutes of the session, so the more practical approach is to go directly to cash.