Possible SPX Declining Channel and ES S/R Levels

After melting up gradually yesterday we have continued to melt up slowly on ES overnight. The support / resistance levels that were established on the way up have continued to be important on the way back up. We bottomed near one at 1177.73 on Tuesday and retested it three times over the next day before breaking up through the next one at 1187.90 late yesterday. Since then we saw a retest of that level overnight and ES is now close to reaching the next one at 1197.21, which looks good for a scalp short as there will probably be a bounce off it even if that level is broken too later on:

That level may not be broken though. If this downswing was not just a two day wonder and we are establishing a declining channel that will last a few more days, then I have a provisional candidate for a new declining channel on the SPX 60min:

If this new declining channel holds, then we should see some very good resistance in the 1200 SPX area, depending on when the line is reached, and would turn down there with a target below 1170 SPX. We would also see a retest of the broken lower trendline of a previous rising channel near the 1200 SPX level.

I don't have any new potential rising channels on the SPX 60min chart as yet, as all three of my previous rising channels have been broken, and we would need to see where we turn down next before I could start to see where a new rising channel might be. On the bullish side on this chart though, there is also the neckline of a potential IHS in the 1198.5 SPX area, and if we turned down from there then we might be watching an RS form with a pattern target in the 1215 area. That is very tentative at this stage though, and even if this forms, the neckline could move if it turned out to be a sloping neckline.

There is another larger head and shoulder pattern that may be forming at the moment, with a downsloping neckline and somewhat further advanced. Here it is on ES:

I don't much like this H&S because of the downsloping neckline, as I have found these less reliable than H&S patterns with horizontal or upsloping necklines in the past. I would find this pattern much more convincing if the right shoulder develops to a similar level to the left shoulder, as classically shoulders should be at a similar level regardless of whether the neckline is sloping. That would take us to my next ES support/resistance level at 1207.46 though and in the process would demolish my provisional declining channel on SPX.

Overall I've no particular feeling as to where this market is going today but I do think that this may well be a good scalper's market regardless of direction. These ES support/resistance levels are roughly equivalent to the SPX ranges 1180 - 1190, 1190 - 1200 and 1200 - 1210, and we seem to be moving up through these ranges at the moment and bouncing well within them. As I've been writing these we've reached my next ES resistance level at 1197.21 and bounced off it and as long as we keep doing that at these levels, then there are a number of scalps to be taken at the least.