Since then ES has returned to retest the rebroken range support / resistance level at 1016.5, and then fallen back to near the lower range trendline at 1101.5. I am expecting a test of that trendline today, and if broken the next target is the lower trendline of the range below at 1084 ES:
Fortunately I cancelled my long orders on ES when EURUSD broke down through an important resistance level yesterday, followed then by ES, GBPUSD and Oil, among others.
I don't think that this is the major top that I am looking for, mainly because the USD currency pairs that I'm watching have not yet reached target. EURUSD and GBPUSD particularly are halfway to their targets, and have stopped at natural internal resistance levels. After this retracement I am expecting their climbs toward target to resume. Here's what I mean on the EURUSD:
There is no pattern on EURUSD that gives a retracement target, but I have found a right angled and ascending broadening formation on GBPUSD with a target in the 1.46 area. This is a medium probability pattern however, and it may not make target:
I also have a retracement target on the Vix of just under 28. There is a declining trendline on the Vix that may well contain any retracement for the moment:
Oil broke the recent rising channel yesterday. Unfortunately a broken channel gives us no retracement target, but I have marked the two obvious retracement targets on the chart.
There are no really solid retracement targets to give here. The highest probability target for me on ES is 1084, as that would be an almost exact 50% retracement from the most recent major low, but 1101.5 may not be broken. More significant will be when we break back up with confidence through an upper range trendline, as that will be a strong signal that the retracement is finished. Until then the range trendlines are still the most important support and resistance levels and should be used for short and long entries cautiously while this retracement continues.
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