As the market rally continues to grind higher and push past potential resistance, the old highs at 1147 are now in sight. Recall that the hourly trading range that formed in January was between 1147 and 1125. Once the 1125 was taken out to the downside that shifted the momentum decidedly down and led to the multi week sell off in the markets. However, the markets recovered and have pushed higher for several weeks now. This is typical of the ebb and flow to the markets.
With yesterdays ESH10 day session high of 1122.75 could prove to be very good resistance just under the 1125 low area of the January trading range. Should resistance begin to form it creates the potential for a lower high to be formed on the weekly charts. This is how tops are formed as a lower high on a weekly time frame could take several weeks of back and forth action to form. Once the lower high is in place then on any time frame you must record a lower low before you can consider the trend of that timeframe to be down. This could be setting up in the current market but it is important to realize this is a process that will take time.
