After several weeks of consolidation, ES continues to work through a constructive bullish structure. Last week delivered a classic false failed breakout, where sellers briefly appeared to regain control but failed to generate downside follow-through. That failure led to an upside breakout and a move back toward the June highs, keeping buyers firmly in control heading into the new week.
The market remains inside a larger multi-week balance, however, so while the short-term trend favors higher prices, traders should continue respecting the upper boundary of the broader range until it is decisively broken with acceptance. Breakouts that fail near major balance highs remain a meaningful risk.
That said, between here and 4th July, further pullback cannot be ruled out with the real move out of the ongoing balance/consolidation resolving post 4th July weekend.
Discord
Perfect foresight from June 21 “extra prep” on discord. We had the pullback going into the holiday week with Friday June 26 marking the lows and primary balance low test. From there on we moved up into July 4th. Then the start of last week we went on a structure repair of both the poor high and poor low from Thursday July 2nd.
The next downside reference is 7472-7476. This area could produce a look-below-and-fail of Thursday’s low, but for that response to matter, ES would need to reclaim 7488-7493 and then 7514-7522.
ES Weekend July 5
Then on Wednesday we finished the repair with cleaning up the poor low from that same Thursday session. ETH marked the low with RTH testing that same area putting in a slight higher low. This created a 145pt move into Friday’s close.
Key Level to Start the Week
7597-7607 is the primary level to watch and includes last week’s VAH.
This area marked the breakout from last week’s consolidation and should now act as support. As long as ES holds above this zone, the path of least resistance remains higher toward fresh all-time highs.
Bullish Scenario
Holding above 7597-7607 keeps buyers in control and targets a retest of the all-time high.
The final resistance before new highs sits around 7633-36, with the current ES all-time high at 7648.75. Beyond that, the upper boundary of the larger multi-week balance comes into focus and is our upside pivot 7644-56. A sustained breakout with follow-through would signal a transition from consolidation back into trend and opens the door toward the next major upside objective at 7690-98 the primary balance 100% extension followed by 7710 FOMC 100% extension.
Bearish Scenario
Failure to hold 7597-7607 introduces short-term risk, but it is not enough on its own to invalidate the breakout.
A true failed breakout requires acceptance below Friday’s low 7552. Initial support sits at 7566-7569, which could still preserve the bullish structure. This spot was a single print from Thursday with London holding it as a back test going into Friday’s open. Losing that level and finding acceptance below Friday’s low shifts focus to 7522-7532 – the weekly pivot, which has last week’s VAL just above.
If sellers establish value below the weekly pivot, downside risk expands back towards 7469-7472, with intermediate support around 7510-7515 and 7490-7493. Note that acceptance back below 7522 makes the primary balance breakout a failure for the 4th time.
ES Weekly Zones
In the weekly chart below, I have highlighted the anchor balance ranges to monitor, which will help us better understand the weekly auction and rotation. Likewise, the zones, weekly support and resistance levels, and annotations highlight the key areas of interest.
ES Live Chart: https://www.tradingview.com/chart/f8EEzTyy/
ES Expected Move this week: 90pts
Grab the 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.
Final Thoughts
The past two weeks have been an excellent example of why understanding the auction matters more than predicting direction. Heading into the week of July 4th, we anticipated the early week liquidation break to repair the 7480 poor low. Once that repair was complete, the market delivered the textbook long from 7472 and finished the week by pressing into new highs.
Looking ahead, ES now enters its ninth consecutive week of balance. After rallying roughly 1,270 points from the April lows, this type of consolidation is both healthy and expected. Markets rarely move vertically forever. They trend, balance, and trend again.
The challenge is that the longer a balance develops after an extended advance, the greater the probability that the eventual resolution produces meaningful volatility. That doesn’t necessarily mean a major correction is imminent. More commonly, it means the market begins testing both sides of the range, frustrating both bulls and bears before revealing its true direction.
That’s exactly what we’ve been seeing. Over the past two weeks, every liquidation break has been aggressively bought, reinforcing confidence in the uptrend. While that’s bullish on the surface, persistent dip-buying late in an advance is often accompanied by increasing complacency, a condition that deserves respect rather than celebration.
This week also marks the beginning of one of the most important macro stretches of the quarter. Tuesday’s CPI release will likely dictate the initial auction, while earnings season begins shortly thereafter and becomes the primary higher time frame catalyst over the next several weeks.
For CPI, our primary reference remains the June FOMC range between 7472 and 7590. Depending on how the auction responds after the release, this range should act as the primary magnet, with its edges providing for directional bias. As always, allow the post CPI auction to develop first and apply balance rules rather than forcing an opinion.
Beyond CPI, earnings become the larger story. The key question isn’t whether earnings are “good” or “bad”, it’s whether they are strong enough to accelerate an already mature uptrend. If they are, ES has room to extend materially higher. If they are not, and particularly if leadership begins to fade after the major technology names report, the probability of a larger corrective rotation increases significantly.
From a positioning standpoint, an early pullback into CPI would be a healthy development, allowing the market to enter the event from a more balanced position. Conversely, if ES continues grinding higher and gaps into the release near the upper end of this multi-week range, the risk/reward for chasing longs deteriorates considerably and could create an attractive tactical short opportunity.
The recent consolidation has built a meaningful amount of energy. When this balance ultimately resolves, the breakout deserves respect and should be traded accordingly. At the same time, remain alert to failed breakouts and look-above-and-fail scenarios. We’ve seen this exact playbook before during prior CPI, FOMC, and earnings cycles.
Stay objective, trust the auction, and let price confirm the next move before increasing risk. Patience remains one of the biggest edges while the market continues working through this mature balance.