TL;DR
For three weeks, S&P E-mini futures (ES) have carved out a textbook pattern: dip, flush, reverse, rally — on repeat.
Monday marked yet another instance of this deep-flush-then-squeeze setup, bottoming at 5870 before pushing up to 5965-5970 key resistance.
The consistency of this behavior has now formed a massive inverse head and shoulders — a strong bullish structural signal.
This price action confirms ES remains in a “buy the dip” macro regime, ideal for failed breakdown traders.
But today’s finish remains just under the psychological 6000 ceiling. Bulls need more than rhythm — they need breakout velocity.
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The market remains firmly in a "Buy the Dip" regime, with ES grinding within a wide, but stable, consolidation band between 5850 and 5970. Each failed breakdown below 5890-5870 has been met with aggressive institutional-style buying. Volatility remains controlled, with intraday flushes used not for breakdowns but for trap-and-trigger setups, favoring reversal and squeeze structures. This echoes tactical accumulation rather than liquidation — a hallmark of late-stage bull moves or pre-breakout coils.
Trend behavior: Upward bias within consolidation
Volume pattern: Increasing on rallies, declining on dips
Failed Breakdown at 5870 (Monday)
Classic failed breakdown: ES flushed right into the 5870 trap zone outlined last week, trapping shorts just under 5877. Sharp reversal followed, converting the move into a near-100 point squeeze.
Shallow vs. Deep Fakeouts
Deep failed breakdowns like Monday’s cause more emotional capitulation (short chasers), leading to stronger reversals. Shallow fakeouts (like Thursday’s 5890 tag) offer quicker near-term pivots but less follow-through unless confirmed.
Inverse Head and Shoulders Confirming
Three-week coil shows text-book inverse head and shoulders with neckline between 5965-70. Break above should target 6000, 6036, 6047, then 6072 with continuation.
Bulls In Control Above 5877
This level has been a magnet and launch area for three consecutive sessions. Watch for dips into it to hold firm. Only decisive loss of 5850 flips narrative bearish.
Daily Levels of Interest:
Support: 5870 (flush zone), 5850 (range floor)
Magnet: 5925 (midrange pivot)
Resistance: 5965-5970 (neckline), 6000, 6036, 6047, 6072
Range Reality:
Still boxed between 5850 and 5965-70, though bulls are now pressing the range highs. A break would shift structure from consolidation into trend.
Trendlines:
Uptrend from May pivot lows remains intact. Short-term trendlines converging toward 5980-6000, creating a pressure point.
The setup favors continuation higher — if we get confirmation:
Bullish scenario: Watch for a clean gap or sustained break above 5970 with volume all the way to 6000+. Prefer shallow dips or opening consolidations that thrust into breakout.
Bearish scenario: Failure again at 5965-70, followed by a crack below 5925 would put us into corrective mode. But until 5870 breaks on close, bears are simply liquidity providers.
No-trade zone: Avoid entries in the 5955-5965 chop zone without a catalyst or strong reversal signal. This zone could trap late chasers.
Stay nimble but directional. Institutional tape remains supportive of dip buys — fading strength likely remains a dangerous play until proven otherwise.
Disclaimer: This newsletter is for informational purposes only and does not constitute financial advice. Please consult a licensed financial advisor before making investment decisions.