The market surged higher in the early morning Monday and maintained the gain for the close. ES broke its small consolidation from the previous 5 days and moved toward the breakout pattern target.
Even though the price has not yet reached the 1120.75 first target, the breakout move and holding the gain will encourage investors to move back the stock market. But as more and more people expect the market to rise from current levels, we may not be too far from the market top, especially around our Change In Trend day +/- 1.
In other words, yesterday or today’s high could be the short term top if ES fails to breakout 1120.75 line, but instead falls below the 1105 line.
Today we may see ES continue going up to hit two unfilled gaps at 1119.50 and 1125.50. If those gaps are filled, we may then see the price pullback above the 1108-07 area.
If the early morning retail sales report causes ES gap down under 1105 for the open, then yesterday’s move could be considered an exhaustion gap move, which is a bearish sign.
ESZ0 Daily chart
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