This should be interesting...
At 02:37 AM EDT, Michael "Oscar" Carbone send a flash update to his followers instructing them to short ES at the market (last bid tick 1528.50), with a stop at 1536.50 (8 points) and a profit target of 1516.50 (12 points).
Over the next 90 minutes, the ES declined 1.5 points to 1527.00 on a volume of roughly 1,000 contracts. (It doesn't take much action to move the ES at 3am!)
I went long at 1527.00.
One of us is wrong.
I have become convinced that the ES is very nearly "required by law" to retest the congestion zone at about 1533 before it can decline. If it penetrates that zone to the upside, it is likely to top out in the 1538 area.
Look at the attached 1x3 P&F chart of the ES (which shows pure price action independent of time). The congestion zones are obvious and correspond almost exactly to the work of Apex82 and Osorico.
Note that the most recent price action was an upside penetration of the 1528 zone, an unsuccessful test of the 1533 zone, and a retracement to the 1528 zone where we are now. Also notice that all prior moves between one zone and another (either up or down) ALWAYS involve at least one retracement and retest before the market either reverses direction at the zone or penetrates the zone and continues. It would therefore be extraordinary if the ES declined from the 1528 zone without retesting the 1533 zone at least once.
Also note the major price channel, and the minor uptrend line that starts on May 17th and remains in effect. That minor uptrend line, if not violated, looks like it will intersect the top of the price channel right at the 1538 area (where Apex is salivating to go short). If it gets there, I'd guess it will be sometime later this week.
As I type this, the ES is back at 1528.50. I'm +1.5, Oscar and his minions are at break-even. Go Oscar...NOT!
