- Main Trend (weekly): up
- Intermediate Trend (daily): up
- Short-Term Trend (480&288min): up/neutral
On the weekly cycles ES confirmed the up impulse, by breaking above the resistance level and having also the mcm-MA crossing over. That means that the main trend is up, at least for ES. As we were noting earlier, YM is underperforming on that aspect quite significantly since because of the bigger correction registered, it still has a few weeks to go before confirming the up impulse. Going forward, the fact that both indexes are above their resistance levels, with ES in a confirmed up impulse is a serious warning for the ones holding short positions. Once an up impulse is confirmed, it is usual for the market to back-test the break-out level and in our case, that back-test becomes very important to see if the market can sustain the up impulse or not.
On the daily cycles, the up impulses triggered quite long ago are in the unwinding (or dissipation) phase. YM already put in a 3rd END resistance, meaning the up impulse finished the unwind and the index is now in a normal oscillation. ES is in a slightly different position since it only had a 2nd END resistance and could have another unwind with a new support and a 3rd END resistance. There is not much change vs what we were mentioning last week, except the fact that the market did come back down and is now right on the 2nd END resistance level on ES. What happens next is key since if the market comes back below it, a new support level could be triggered, looking for a corresponding 3rd END resistance higher. If the market manages to hold above and break into a nested impulse, that would be a sign a bigger up move is coming.
480 and 288min cycles show nicely the flatish structure in which the market held, despite some minor new highs. 288 finished the unwind of the up impulse with a 3rd END and is now oscillating, having had already a support level trigger. 480 has had the 3rd bullish retrace support (BR) and now needs a corresponding 3rd END resistance higher. Reaction to that 3rd END is expected to be significant.
In conclusion, we have a confirmed up impulse on ES on the weekly chart which points to more upside. However the daily and also the 288/480min cycles are in terminal phases of the up impulses. That structure contradicts with a fresh up impulse on the weekly unless the market manages to break into nested impulses on those time-frames. The next 1-2 weeks appear to be key in regards to which scenario will play out.