Markets come into the week with buyers still firmly in control, and that deserves respect. ES broke its multi-day balance to the upside and closed just above the top of that range, which keeps the short time frame trend pointed higher until proven otherwise. At the same time, I do think location matters here. ES is now pushing into an area where upside becomes more awkward and where I do not want to be casual pressing longs late, especially with major earnings and FOMC on deck. The trend remains up, but this is the kind of spot where discipline matters more than excitement.
The core idea for the week is fairly straightforward. ES is still bullish above its broken multi-day balance, with 7177-7182 (balance top) acting as the key pivot. As long as that area holds, inclusive of a LBAF, the balance break remains intact and the path of least resistance stays higher. The bigger upside objective from that break is broadly 7280 (100% balance extension), with intermediate extension levels at 7206-11, 7232 (approx. SPX Q2 EM high), and 7269-74 along the way.
I do think it is reasonable to be skeptical of the upside break on ES, but skepticism is not the same thing as guessing. Structural conflict has developed between ES and the broader tape, and that can make ES a little awkward to trade at times. Even so, all of this is happening above the prior all-time high breakout, which remains firmly in favor of bulls. So while this may not be the most comfortable area to initiate fresh longs, there is still no meaningful evidence of a durable top unless the market starts losing key structure.
On the bearish side, a loss of 7177-82 begins to make the move look like a failed break of the multi-day range. That would be a valid short setup, at least initially, but I would be careful not to immediately assume it marks a durable top. Remember, shorts are still “rentals” until sellers actually hold lower highs and lower lows including taking out prior day lows. Failed upside breaks this year have often been traps rather than true reversals. So if ES loses 7177-7182, I would initially lean short, but I would also be alert to the possibility of a quick trap.
The first downside area below there is 7115.5-7121, which stands out as the most likely zone for stronger buyers to step in and defend Thursday’s excess low and last week’s VAL. A hold there, or a quick LBAF, would be constructive for bulls and could preserve the broader uptrend. If that area fails and sellers begin offering firmly below it, then last week’s low comes into play, 7078-81. A true continuation break of last week’s low would finally bring the weekly timeframe to balance and mark an intermediate trend pause, with the short time frames shifting into a downtrend unless it occurs via a gap that is immediately bought.
Even then, it is important not to overstate the bearish implications too early. The prior all-time high breakout area around 7043 ETH and 7031 RTH still has the potential to produce a constructive daily higher low, and there is even room for a quick trap toward 7012-7019. The larger point is that ES has rallied so far, so quickly, that even a meaningful retracement could still be completely constructive within a bullish structure.
At this stage, the cleanest way to frame ES is that buyers still deserve the benefit of the doubt, but not blind trust. The trend remains higher until proven otherwise, and fading strength simply because it feels extended has not been a winning strategy. At the same time, we are no longer in the kind of location where I want to press longs carelessly. Respect 7177-7182 as the key pivot. Above it, the balance break remains intact and higher stays in play. Lose it, and the market finally has a chance to pause, test for stronger demand lower, and force a more two-sided decision. Until that happens, bulls remain in control, even if the tape is entering a more dangerous place to chase.
ES Expected Move this week: 130pts
Grab the new expected move indicator and add the updated dataset to display the levels that are shown for all the products on the table into your TradingView chart for the coming week.