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ES #F Pullback
Yesterday we saw a big yellow up bar representing Crowd activity (Kamikaze trading). Typical crowd behaviour often happens at a high/low where these traders get excited about the substantial up/down move and go into a buying/selling streak expecting price to rise/drop even more. This is where the more informed Smart money take the opposite side of the trade. We can see that after the Pullback/Reversal warning signal, Selling pressure developed confirming this scenario. Price moved down from the high of 2577.25 to a low of 2561.50 finding support at the anticipated 2562.50 area, a nice 16 point down move.
We had a Smart money down bar at the last swing low and thereafter price moved sideways. The current and previous two bars are trading within the range of the Smart money down bar. The $VIX (Volatility) rose to just above the 11-point level yesterday, but is currently consolidating. Any move to the important 12-point level will bring more uncertainty into the market and can lead to more weakness. Currently there is still Selling pressure with support at 2558.25. A bar close below 2544 can lead to more weakness. If Buying pressure develops and the $VIX do not progress upwards, we should see an up move again.
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