ES - After a textbook Gann day yesterday, we are snug between two major Gann lines. Since we are moving downward, I took the Gann measurements from the recent swing high on the daily chart. The center line is 90°+45°=135° (874.25). December seems to be an odd month for trading, so I have prepared multiple scenarios, just in case!
- Sell 874 (135° line), if prior to getting to 865.
- Initial target 865
- Summary: This played out right after the close. We fell 45° (869) instead of a full 90° (865). I should not have added this scenario to HW.
- If we just go down from here, Buy 865, the intraday 90° level
- Target 874 area
- Next Target 889-893
- Summary: Never got there before the "Bull Scenario" below. So, off the table. However, as mentioned above, we got a 45° break instead of a 90° break, then a rally. The idea worked, but didn't get triggered.
- Bear scenario: If we fail to rally off 865, and instead fall through it, look for support at:
- Target 855-860, 180° area and yesterday's lows
- Next Target 830-835, 270° line and the light gray line from our pitchfork
- Summary: We rallied instead of breaking. Levels may still prove important.
- Bull scenario: If we rally early in the day (prior to the above failures), look to sell 889-893 area (90° line and yesterday's highs).
- If we rally late in the day (especially, if off the 855 area), look for a target up to this same 889-893 area.
Homework