The ES is in mature Balance Area. “Mature Balance Areas” at any place and time within larger development represent some of the best opportunities for directional trades, both intraday and swing trades. The potential of this particular Balance Area in the ES is enhanced because of the larger degree structure under which it has formed. The S&P is less than 5% from all-time highs. Stock market internals, and specifically breadth, are in patterns that almost always resolve in sharp, multi-day moves.

If the ES/S&P follows expectations for this sharp move the other indices will almost certainly move sharply and in the same direction as well.

We’ll let the market decide the direction and try to position for a nice ride. The break of last week’s range is the initial directional tell. A break to the upside should not subsequently trade below 1516. Doing so would be a strong reversal signal to the downside. A break to the downside should not subsequently trade above 1518, and doing so would be a strong reversal signal to the upside.