In the 60 Minute ES Futures chart above, the market has traded within a Primary Equilibrium Zone from 1400 to 1320 for the past month. Within the Primary Zone is Secondary Zone 1 from 1365 to 1340, which has provided support for the past 4 trading sessions. The market is currently trading in a range called Secondary Zone 2 from 1365 to 1340.
According to the Stock Trader's Almanac, the next week and a half is statistically bearish. The two areas to watch for support in a bearish environment is 1340 and 1320.
In the ES 5 Minute Chart above, the statistical open range relative to the 0930 ET Open is from 1338.75 to 1350.75, with the open being 1344.75. The lower half of this statistical range just happened to also be the upper boundary of Secondary Zone 1 described above. The market on Friday tested this lower support area twice, creating a double bottom, which then attracked buying in the afternoon. This reversed a day and a half correction, leaving the close above the Point-of-Control of 1345. Friday's market created a large volume support area from 1338 to 1345, creating what the Daltons call a "b" formation. This area will probably be tested again next week.
The Cumulative $TICK Indicator confirmed the afternoon buying spree. Notice the cup and handle formation.
Additionally, Friday was a Narrow Range 4 and 7 day.
Charles
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