ES Monthly Bar Chart:
The ES is trading inside a four day balance from 8/22 to 8/25. . Generally, the longer a market remains within a tight balance, the stronger the move out of it can be.
Four Day Balance
Potential balance scenarios that could apply in regard to the 4 day balance: Look above or below balance and accelerate, look above or below balance and fail and return back into the balance potentially targeting the opposite end, or remain in balance.
If the market opens inside of Friday’s range on Monday (regular session), notable market profile references are Friday’s rally high at 2449.50 and the poor no excess low at 2441.00. The profile also left a wide point of control at 2446.00, which could act as early support or resistance.
Trading above 2449.50 puts price back into the upper distributions from 8/17 and 8/22 , acceptance above 2449.50 targets Friday’s high, and the current 4 day balance high at 2454.00.
Acceleration above 2454.00 would be a break out of the current four day balance with the potential of a larger price move higher. If the market breaks out to the upside with acceptance, potential higher price levels are noted in this previous post. Failure to find acceptance higher brings price back into the prior range, potentially to eventually retest the low end of the balance.
On the downside, repairing and trading with acceptance below Friday’s poor low at 2441.00 should have good odds of testing Thursday’s low at 2434.50 and the four day balance low (and top of gap) at 2432.75, and potentially the gap fill from 8/21 at 2429.50. Further liquidation could target the current August low at 2415.75
With only four trading days left in the month, the potential still exists for the monthly one timeframing higher to end. The July low is at 2405.25, with the June low just below that level at 2402.25. There are potentially significant stops below those levels.
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