Sign of Turning Tides

The June ES contract closed at 780 today. I consider this is a sign of possible turning to a down trend.

My reasons:

1. ES has made a double top at the 800 level.
2. There is no meaningful retracement to the upside during the day. This is a very clear sign the longs are taking profit.
   
3. After hour, it has dipped a little below 780, a level I considered important.
4. The up move yesterday was caused by a Fed decision to increase money supply, not a change in company profitability.

This has give me confidence in keeping my current ES short. I have confidence that ES will test the 760 level or below in a couple of days.

Friday is option and futures expiration day. Because the chart formation is pretty clear now, option expiration is only adding noise to the chart and may be delaying the drop to next week.

Friday's trading plan is as follows:

1. Maintain ES target at 761. If 761 is reached before market open, take it and short again after market open.
2. If 761 is reached after market open, re-short decision will be based on intraday pattern.
3. If 761 is never reached, but ES does not rise in significant way, add one more short near market close.
4. If 761 is never reached, but ES turn around and stay above 800, cut loss.

At current price level and chart pattern, it does not make sense to initiate any longer term long position, unless ES drops below 760 and shows a promising turn around.

Thursday trading: I did some scalping using the YM contract, not touching the ES contract.

Position: -1 June ES