Master Che's  Instablog

ESH12:

12/27/12

8:55EST

It should be quite interesting because yesterday we developed 2 separate patterns of which one is bullish and the other bearish.

Bullish Pattern:

Bottom/Reversal pattern

Pointing Up

Up Price Target: 1440.25

Equalizer: 1418.25

Down Price Target: 1396.00

Confirmation levels:

Above 1418.25 opens the bull door

1421.50 Or higher (1 closing bar 360m) confirms or we're in the bull room

Bearish Pattern:

At 1421.50 we developed a compression detachment which always appears at the beginning of a major move, in this case down to 1341.25

A daily close at or below 1409.00 confirms the pattern (move down)

Commentary:

1407.50 to 1411.50 is a key major infliction level in addition it is a very strong buying support level as such a bounce (1440.25) would clearly be in line.

The last expanding top formation (pattern) failed to expand to upside (Bearish) in addition it failed to bounce from the mini flash crash, 1426.00 is the mini flash crash resistance pivot since 12/21 any and all bounces have failed to reach this key resistance pivot (bearish)

In short all the major markets and stocks are creating a very bearish set-up, somewhat similar to April-August 2011, the only difference being this set-up is far more bearish

Now Term:

On or near such a key pivotal level is always difficult to call especially during holiday trading. Normally this level (without a major news event) would hold upon several attempts with viable bounces.

It failed to reach 1410.50 on the AH although the bounce failed to 1418.75 and 1420.00; which were up targets on new overnight small patterns.

My Bias:

Until it trades above 1418.50 (min.) I'm strongly biased to the downside although in the event it fails to clearly take out 1412.50 (the after hours OAV) this means we're in the very early stages of the ATTEMPTED bounce (1440.25)

Volume is quite light and it doesn't take much either way