The E-Mini S&P 500 futures traded within a compressed price range in the month of March, which suggests we could see major expansion in April.
Still Targeting Above 1900
In the Mar. 4 edition of the Opening Print (E-mini S&P 500: 1900 or Bust) I wrote: “price remains on course to reach our 1900 level by April, with a current primary monthly bull target at 1908, and an ABCD measured move target at 1944.75, which has a May/June timeframe target.”
So far, the E-Mini S&P 500 futures have yet to reach 1900, but have come close. Overall, price remains within an uptrending price structure, but sellers have done a solid job of keeping a lid on prices above the 1866 key level, which led to balanced trade throughout the month.
But this balanced range in March will likely lead to the next big phase of expansion in April.
Compression Leads to Expansion
The ES has averaged 101.25 points of range per month over the last 10 months, but traded a range of just 57 points (56% of average) in the month of March, which had 21 trading days. Not only that, but the ES has traded inside this 57-point range for 25 days and counting.
According to my ADR Method, when price trades a range that is 65% of average range (or less), this suggests a compression phase, which usually leads to expansion in the upcoming period of time.
In essence, once price breaks free from balance, we’ll likely see imbalance and a trending phase in April, which could spark the next 100 point move.
Key Levels and Targets
So far, value has mostly remained near the top end of the trading range at 1865.25, which is the current micro composite volume point of control (MCVPOC). Price has been rejected time and again between 1866 and 1876 over the last several weeks, which has led to selling pressure into the bottom of the range between 1824 and 1834.
If price cannot establish acceptance above 1876 soon, a rejection of current value at 1865.25 would suggest a price discovery phase into prior lower value at 1828.50, with a shot to reach lower price levels at 1800 (LVN), 1775 (CVPOC), and critical support at 1725 (LVN). If you’re a bear, you want sellers to continue to keep a lid on 1866 to 1876, and you want price to eventually run through LVN support at 1824.
If the bulls can get price to gain acceptance above 1876, this could begin to trigger upside buy stops into 1900, 1937.75, and 1980. The 1937.75 ABCD measured move target remains in play as long as price remains above the C point of the pattern at 1725. As mentioned before, this target could be reached some time in the May/June timeframe. If you’re a bull, you’re looking for price to push beyond 1876, or you’re looking to be patient for swing buying opportunities at 1824, 1800, and 1720.