Mostly choppy trade in the ES early Tuesday with no real acceptance above the previous day’s pullback low at 2324.50 until the fifth (E) period, before price accelerated through the latest all time high at 2229.00 in G period, forming a second, higher distribution.
Early pit session trade was also very mechanical to the short side – the A period high was just a tick below the previous close, the B period high a tick below the overnight half-back level, and the C period high exactly at the opening price. The market formed a poor C/D period low and one time framed higher through J period.
The one timeframing higher off the poor low didn’t stop until K period, but resumed after forming a small inside bar in L, where the market broke out higher to rally into the close and to another new all time high.
If Wednesday’s pit session opens above Tuesday’s late K period pullback low at 2331.25, that level could be short term support and keep the uptrend in tact. Failure to hold above that level should see price test the low of the upper distribution at 2329.50.
Looking at the two distributions as a separate day, or balance, balance trading rues can apply: Look above or below balance and accelerate, look above or below balance and fail, or remain in balance. When price is accepted back into a previous balance the opposite end of the balance is the potential target, or destination trade.
The market is very long.
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