S&P Futures (Symbol: ES) are modestly chiseling away at their tenth consecutive day higher on this President’s Day, an event that has occurred only 2 times in the last 20 years (with both occurring in the last 5):
- 11 consecutive days in March 2010, amidst a run of 35-of-50 up days that added +14.84%; and
- 10 consecutive days in July 2013, inside a run of 23-of-28 up days that added +8.76%.
ES – February-July 2010: 11 Consecutive Days Higher (click image to zoom)
ES – June-August 2013: 10 Consecutive Days Higher (click image to zoom)
These runs ended with ES pulling back to below the close of the tenth consecutive day higher, giving back -16.55% and 4.4%, respectively. Before it rolled over, though, ES added +5.8% after that tenth consecutive day in the first case; and in the second, ES ran another 1.5%.
The current run is shorter and comparatively swift, adding +5.84% from 02/03/14’s closing 1736.50 low to the present. How could it end? A leading scenario: A Bearish Shark harmonic pattern unfolding here suggests a potential reversal zone +1.03%-1.79% higher, ending the current run at +6.87%-7.63%.
ES – January-February 2014: 10 Consecutive Days Higher with Bearish Shark
Primary downside objectives off the Shark come in at B (the 50% retracement from the PRZ to C, like in mid-2013) at 1797 – where it may turn into a Bullish 5-0 pattern – and the 61.8% retracement at 1781. A move similar to 2010’s sell off goes to the 127.2% extension near 1695.As with any pattern, flexibility is the key to successful risk management and avoiding the forfeiture of a great trade in favor of a merely good one: these are tentative objectives, not presumed bounce points and it goes without saying that follow through from this pattern could always devolve into a more substantial correction.
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