In last week's webinar, I showed a 45 minute chart projecting a likely breakdown on the ES contract. We identified key support levels on this, and on the YM 45 minute, which if broken would imply that we'd see a deeper low than was in place at that time. Those support levels broke, and now we've hit the downside target on that 45 minute ES chart as shown below:

Click on image to enlarge!

The bold green lines at the low represent a target overlap taken from 2 swings into the recent highs as shown in the webinar. These targets came in at 1316.75 and 1316.50, and the low was 1316. This created a perfect Gartley support “zig zag” pattern with a high probability of holding and we’ve had a straight up rally from there. We still need a break of the key intervening resistance levels labeled in order to show that the downside pattern of lower lows/lower highs will not maintain. Breaking above the 1347 area would give a high probability that we’ll see new daily swing highs, and as such this presents the strongest obstacle to upside follow through on the chart. The pattern is intact to upside as long as the support at 1321.25 remains intact. Longer term traders can use a stop slightly below that level, which will also rise as the rally continues. Or if money management requires a tighter stop, the closer .382 level at 1331 can serve a similar purpose.

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