ES #F Analysis for 01.26.2007

Monthly chart remains bullish. No clear sell pattern in place as of yet. Up trendline from 2002 low remains intact.

Weekly chart shows toppiness with divergence. IF market continues to show weakness and starts to fall further, THEN first target will be the .382 fib level at 1364 area.

The daily chart shows the congestion or trading range of the last 6 weeks. The move up to the 1447.25 high has been made with divergence. Currently we have triple divergence in place. The sell off from the 1447.25 high resulted in a bearish engulfing candle reversal pattern. We have a possible 5 waves up from the 1378.50 low. IF we have 5 waves up, THEN we usually look for a retracement of this range. The weekly chart is set up to have sell trigger. IF we have the sell trigger, THEN look for market to retrace to the 1404.75 level as possible.