Today/yesterday was a good day for classical technical analysis. As I wrote yesterday, ES put in a bullish hammer candle, today ES finally got a good green follow through day. The size of today’s rally was no surprise to classical technical analysts as it was triggered by a breakout of a clean bull flag pattern (in white in my below chart).
I wrote yesterday regarding this pattern & the bullish hammer candle: “Combined, its quite bullish and would be expected to a produce a rally that sees 4440 at least, probably 4500 though but as with everything in markets, this a game of probabilities and anything can fail”. We got mostly there today.
The question as always now is, what’s next? ES has struggled to put together consecutive green days. The setup is here now to do it and about as good as it gets, but there are some significant overhead hurdles which makes me think this won’t be a clean move. Here’s what I’m looking for: