- Main Trend (weekly): neutral
- Intermediate Trend (daily): neutral/down
- Short-Term Trend (60min&135min): up
The weekly cycles are still just oscillating, however there has been a significant development this week, in that both ES and YM triggered support levels (highlighted on the chart). This means that although the trend is still neutral, the normal expectation shifted from down movement to up, until a new resistance level is triggered. If the market starts heading lower before a resistance level is triggered, the support levels (1804 ES and 15364 YM) are very important to watch, since breaking them would start an impulse down.
On the daily cycles, YM broke its support level and confirmed the down impulse. As mentioned last week, YM could unwind the impulse in a similar manner to last impulse. The market bounced quite strongly from the lows and therefore we are coming in an area in which the appearance of a bearish retrace (BR) would be quite possible. ES broke it’s support level initially, but manged to recover and bounce back over it. Therefore the next level triggered should be a 3rd END resistance, pointing in the same direction as the (potential) BR on YM. For early clues as to where these resistances might trigger we will have to watch the shorter time frame cycles.
The 60 and 135min cycles oscillated for a while after completely unwinding the down impulses with a 3rd END. Currently both confirmed up impulses, while 60min also had a capitulation bar (red bar on the chart) at the top on Friday. Although that is a serious warning for bears, once an impulse is confirmed it usually back-tests the break-out level before really taking off. In the current context, this back-test becomes very important going forward. If the market manages to hold those levels (1903.25 and 1896.5) then more upside is likely before the up impulse will start to unwind. If the up impulse is reversed, with the price moving below the break-out levels, then the reaction to the next triggered support level will be key.