Introduction
In the previous analysis, ES had broken above the prior all-time high, and we were questioning whether it could hold that level moving forward. So far, that has been the case as more and more buying interest enters the market.
Price pushed above the 7,100 level, which was its previous all-time high. As mentioned in our previous analysis, this was because of the de-escalation talks in the Middle East mainly. Now that bulls are establishing a firm footing once more, is it too late for new buyers to get in? Is there too much risk in the market at the moment because of the conflicts in the middle east and the upcoming inflation and FOMC data?
Important Levels
The levels have not changed much since our previous analysis.
- Support: 7,080–7,130 (previous ATH, now holding as support)
- Next support: 6,800–6,850
- Upside: No clear resistance (price discovery)
The most important level remains the 7,100 area. As long as price holds above it, the breakout is valid.
A move back below that level, especially if it holds there, would shift the tone quickly and turn into a false breakout. This again though is likely only if there is a shock in the FOMC data on Friday or if there is a big escalation in the middle east. At the moment, the Dollar is weakening, which is also helping US equities.
Scenarios and Probabilities
| Scenario | Description | Estimated Probability |
|---|---|---|
| Continuation | Holds above 7,100 and continues higher | 50% |
| Consolidation | Builds a range above breakout before next move | 35% |
| Failed Breakout | Falls back below 7,100 and rotates lower | 15% |
Possible Trades
Taking any trades now is risky because of the upcoming data. Longs are more favourable at the moment though and any pullbacks into the previous ATH at $7,100 would be a good starting point.
Traders need to measure up the risk of taking a position now because of the data and whether it is a smarter play to wait it out until next week.
This analysis is for educational and informational purposes only and does not constitute trading advice. Futures and forex trading involve significant risk and may not be suitable for all investors. Always conduct your own research before making trading decisions.
