Pre-open Tuesday 8th August
Monday’s Value Area was higher, wider on reduced volume. I marked aggressive Buying (green at top). This normally indicates higher in the short term, i.e. 80% of the time the following day will test the high.
The day session low on Monday was 988.75. The day following a green-at-top-day rarely tests the previous day’s low. If that rare event occurs then it would be an indication of a possible shift of control away from the Buyers. Currently (four hours before open) ES has traded down to 992.
This is an overbought market and major charts are hitting resistance (see webcast) but it is wise to play the odds. A very good rule for me is: never fade the last imbalance. The last imbalance was Buying (green). I will not look to short at least until Significant Sellers are marked and that hasn’t happened for nineteen days now.
