On November 8th the ES made a high against the 1.618 target of the prior high to low swing. That let us know that the swing was rather extended/overbought and we had to be on the lookout for a pullback. Since the overnight market showed a pullback in progress, it was time to identify key support levels and targets to downside.

Here is the 45 minute ES chart we were working with yesterday morning pre open:

Click on image to enlarge!

Once the labeled support bat 1243 broke, the target became the 1.272 price extension of the prior low to high as shown with the red trendlines. This target also presents considerable support since it has an overlapping .786 retracement of the entire November 1st low to the November 8th high. A break below this level should lead to a target below that November 1st low.

Here’s this morning’s chart:

Click on image to enlarge!

Once again the predictive ability of Fibonacci levels paid off. Yesterday’s low was a tick below our target and support zone. We’re seeing some signs of recovery this morning, but just in case this support doesn’t hold I’m showing how the next downside target is calculated. If the support holds though, the most important intraday resistance levels are in bold, with a special emphasis on the .786 at 1264. A break of that resistance would confirm that we’re still on track for new daily swing highs.

For more from Mark including his “Chart of the Day”, visit MJBraun.net.