Yesterday ES opened flat and moved up strong first to make new highs at 2101.25 – the psychological resistance we mentioned yesterday — before it lost its upside momentum. At the end it closed at the low of the day’s range, a little above last Friday’s low. Despite yesterday’s weak close the ES has made higher highs and higher lows for the past four days.

ES failed to follow through on Friday’s rally which closed near the daily high – although on light volume. It tells us Friday’s rally resulted from the weekly option expiration. But the lows made last Thursday and Friday play a major role for today: by holding above them the ES has a chance to move back up to a new high again.

There is another possible outcome. We have been looking at a potential A-B-C-D-E on the daily chart, but for this pattern to work the ES has to stay under the 2101.25 level and continue fighting to break through the support at 2075-70 to reach the E low around 2065-60.

We need some very bad news to push the ES into a flash downside move to break that support. Otherwise the ES will hang up and fight back up. 
A move above 2105 will breach this pattern and push the price up to 2115-20 to test the March high.

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