As discussed previously, the 45 minute charts on these two stock index futures contracts have served us well in identifying short term turning points since the March low. Yesterday I posted these charts showing that the key support level to watch on ES is 904.50, YM 8366. Through a choppy session yesterday these levels remained intact and are still valid today.

If they're broken though, we're looking to an initial downside target at 890 on ES and 8241 YM. Should this sort of decline come into play with those key support levels broken, I'll project Fibonacci Timing lows to see if timing ratios will coincide with these targets and reinforce them to halt any additional decline. Since the rally began in March, we've seen several instances of just this sort of corrective move with termination of the decline at the target extensions from the swing into the high.

ES 45 minute chart:

YM 45 minute chart:

If we should see a rally this morning, 923 is the upside level to beat on ES in order to put this back on track for new daily swing highs. A break of 914 would go far in that direction! 8513 is the corresponding level on YM, and while we're seeing a pullback in pre session trading, prior resistance breaks reinforce the idea that the overnight rally will continue into the day session.

In yesterday's article I explained some of the basics regarding Fibonacci Timing work and how we're looking for a significant index high for next week. Please reference yesterday's article for this information, or visit my site – full update available in my free forums.