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S&P500 (ES) Reverses Most of September-October Dip

The S&P500 (ES) is hesitating in today’s Asia morning after 4 days of gains. Significantly, although ES is trying to extend the upchannel (on the weekly chart) after bouncing off its support 2 weeks ago, any break today below the ascending wedge support (on the 4hr chart) will dramatically increase the odds of ES forming a lower October high versus the September high. Nevertheless, with ES just a day or so’s volatility from its record high in September, bears should not rule out a further short squeeze this week back to this key level. The weekly and daily RSI, Stochastics and MACD are bottomish, rallying or consolidating recent gains. I am looking to go short in the red zone (of the daily chart), targeting the green zone for Monday. The amber/yellow zone is where I might place a stop if I was a swing trader (although in my personal account with which I seldom hold overnight I sometimes set my stops tighter).

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