Sentiment: Neutral

Previous Week Analysis:

Weekly Chart:

I’ve removed some key indicators, such as wedges and legs, from the current chart, as the market has completed the analysis I previously conducted. If needed, you can refer to last week’s analysis for context.

The ES exhibited strong bullish behavior last week, closing at its high, above the open of the bearish breakout of the week ending December 16. This signals a solid bullish sentiment, at least for last week. As analyzed earlier, over the past few months, the ES has been moving within a broader bull channel characterized by:

1. Three pushes up around July 15, November 4, and mid-December 2024.

2. A significant pullback with three pushes down(Bear Broader Channel) from December 9 to January 6.

3. A notable reversal starting on January 13.

I also noted that the market seems to be transitioning from a broader bull channel into a trading range(OR a more flatten broader bull channel) , with the following characteristics:

1. Two legs down during the pullback from December 9 to January 6 (this pullback forms a wedge on the daily chart, while it appears as two legs down on the weekly chart).

2. Two legs up, observable on the daily chart (to be discussed in the next section).

The market is clearly not in a bear trend. However, it’s still uncertain whether a top has formed and if a trading range(or a more flatten broader bull channel) is developing. This uncertainty arises because last week’s high did not surpass the high from the week ending December 16 and started to pull back on Friday, probably leading to a two legs up Trading Range. On the same time, the higher low observed on January 13, when the market reversed to “always in long,” suggests a high probability that next week the price could move higher and potentially create a new high with a more flatten broader bull channel(see the red trend line in the chart). In either case, the market probably will not go further higher, unless there will be some very strong bullish momentum due to some fundamental changes/ financial data.

Daily Chart

There’s not much to mention on the daily chart, as most of the key points have already been covered in the Weekly Chart analysis, including the deep wedge pullback and the two legs up reversal. However, one important detail to highlight is that, technically, last week’s high actually exceeded the start of the bearish breakout on December 17, which was 6132.25 (this is noticeable only on the 5-minute chart). The tricky part is that the market closed just below that level last week at 6131.75.

The former point suggests that the bulls are strong and eager to push the price higher, potentially aiming for an all-time high. On the other hand, the latter point may indicate that at this specific level, bears are finally starting to defend and enter the market, signaling their intention to eventually push the price back down, at least back to a Trading Range.

5 Mins Chart

From a 5-minute chart perspective, it was clear last week that momentum went weaker and weaker from Tuesday to Friday (with Monday being a holiday). However, the market still left three gaps, suggesting a strong bullish trend. On Thursday, the bulls successfully defended the price around 6110, but the price didn’t move much further and instead returned to the trading range (TR) or the bullish channel (as indicated by the red trend line).

If the bears are starting to defend more aggressively, their first priority will likely be to close these gaps rather than immediately pushing for a full-on bearish trend(Note that even within a larger trading range (TR) or a broad bull channel, there could still be a short-term bearish trend). Therefore, next Monday will be crucial to see whether the price moves higher or tests the first gap bottom around 6110.

Technically, from Wednesday to Friday, the market appeared to be forming a small broad bull channel. I expect a third push before the market starts to pull back. This third push has a high chance of surpassing the previous all-time high (ATH) of 6180, possibly reaching 6200, which corresponds to the flatter broader bull channel reflected by the red trend line mentioned in the daily chart analysis.

If everything follows the technical analysis, after reaching a new ATH, the price will move back and test the gap. Whether the bull can successfully defend again the bottom of the first gap about 6110, it is unclear at least for now.

S & R

• Resistance: 6180, 6200(New ATH)

• Support: 6110 and if break it strongly, the trend will like be ALS.

• Note next Wed is FOMC, So before that, there might not be strong trend and the market probably will behave mild. The direction will be determined after FMOC on Wednesday