Stock, Option and Futures Trading
Its more than a price wedge
It is easy to see that the markets are in a daily wedge. If you break down the time portion of the wedge even just the last two legs you will see we are at a .618 time resistance on the candle of today. From the 11/25 low to today we are 21 bars. From the high of 12/7 to today we are 13 bars. Now take 13 and divide it by 21 and you will get .619
If we close today where we are at with a DOJI then take out the high of today tomorrow the move could be powerful as it breaks the price wedge and the time resistance. Tomorrow if we take out the low of today we could have a fast and hard move to the downside.
To get odds on which one follows through go to the higher time frame and look at the structure which is higher highs and higher lows so we would have to say it is a uptrend and the odds say we go higher.
Now that we have odds we can then look at the variable which would be a hard move down BUT support holds and the breakout is further out in time meaning; from the time resistance right now we go down off the resistance but the result of the move down does not break the bullish structure and then we go up to break the price/time resistance in the future (4-8 days out).
At obvious price levels like we are at now often times the market will do the exact opposite of what it should and if we go down then the shorts will pile on and if we get a lot of traders short and then support holds we could have a short squeeze to get us to a new high.
The TF,DOW and NQ all have a little different time count so maybe the ES timing has great value and maybe it does not. For now we would say it does have value because the markets are flat today and most traders were thinking we would breakout to the upside hard today (which we still can the day is still early).
The timing is just something to keep an eye on as we go through today into tomorrow.
PS. We do not have to pullback to then break the timing high. We could stay right where we are now and then break it as the time goes by. These are daily bars so we will not know until tomorrow.