Yesterday we saw a sharp decline from the daily ES target at 927.50. The high of day was 2 ticks below that, and there was a rapid decline from that point. Our focus has been on the 45 minute charts since the Fibonacci Price and Time work on this timeframe has been a great guide throughout the rally since the March lows. Key support and resistance holds and breaks have carried over to the daily timeframe to indicate directionality, when to expect pullbacks and when to expect the rally to resume.
Here's the ES 45 minute chart:
You can see the reaction from the bold green target extension yesterday morning. In the afternoon, price found support at a 100% projection of a prior high to low swing, indicating that the rhythm of the rally is still maintained. We also had timing low factors at that point, showing us that there was also symmetry between the numbers of bars in prior declines and yesterday's decline too. On the way back up, the key level to overcome will be 920.75, the .786 resistance of yesterday's high to low. If that level breaks, we're cleared to new daily swing highs. The time when we're most likely to see a decline if the resistance holds is 10:45-11:30 Central.
On the YM, price hit an extreme 45 minute target yesterday morning to the tick:
8570 was the 2.618 target extension of a prior high to low swing. YM found support at the target extension from the swing into the high; a likely termination point for a decline if it's just a corrective decline and not the start of a major trend change. But this pattern also reinforces the importance of the .786 resistance since it forms a potential reversal point based on the Fibonacci price ratios involved. Breaking 8516 is critical to the health of this rally and if we're going to see a longer term failure it's very unlikely that we'll see a break of that level. We'll be focused on signs of potential price failure until that breaks, and hopefully it will do so early in today's session!
Mark Braun Market Geometry