ES December Contract analysis

About me - I'm a qualified Technical Analyst, a member of The Society of Technical Analysts in London and ,I trade my own capital part time. ES1 / SPX is my most traded instrument and I've been trading it for over 20 years. If you find my analysis useful please do hit the like and follow buttons. As a member f the Society of Technical Analysts I am providing market analysis only and NOT financial advice of any kind.

Further to my previous post ES did indeed decline to 3950 then rally to 4100 before bouncing off the declining trend line that has held all year.

Whereas I like to keep my charts clean and simple there are a few indicators and chart patterns that I'm interested in right now so I've piled them all on to this chart. Sorry if it looks a bit cluttered.

On the Bullish side

• We have the daily price action well above and clear of the Ichimoku cloud.
  
• Price held above the 200 Day Moving Average for two days last week but closed below it again today. We haven't had a sustained close above the 200 D MA since late March this year.
  
  
  On The Bearish side
  
  
• A strong bearish reversal pattern in the Japanese candles since 30th November including a strongly bearish day today (5th November)
  
• A retest of the bottom side of a trend line going back to at least June 30th
  
• A retest of the downward sloping trend line that has held since 4th January this year
  
• A bounce from the bottom of the Weekly Ichimoku cloud
  
• The 9 period RSI on the Daily chart is still flat and not peaking with price action
  
• The MFi Money Flow Indicator is declining and showing Divergence from price action
  
  Summary - preferred view
  
  
• A potential decline back to 3975 area - the Weekly Pivot S1 level
  
• Lowest 3950 to 3935 where we've had good support (see previous posts)
  
• A rally back to 4100 area
  
• A sustained breach of the downward trendline from 4th January and the 200 Day MA should be contained for a day or so by the Fib 786 retrace level of the August high to the October low at 4151 and the September high at 4175
  
  The bigger picture is we are in year 2 of the 4 year cycle that historically sees markets move higher over the next 2 years. This underpins my belief that we'll get a Santa Clause rally this year above the 4300 area into year end.
  
  
  Alternative view
  
  If we languish below the 4,000 area for more than a few days we could see a deeper correction before the year end rally.
  
  Finally - NB
  
  ES December ESZ2022 contract ceases to be the FRONT contract after the close this Friday when the March contract ESH2023 comes front. Be careful that you are analysing and trading the same instrument as the price differences can be vey slight at the beginning of the changeover. Your broker might show the Front contract by default always check.