ES Holds Trendline A Uptrend Intact

ES closed right at support from trendline A. That counts as a hold in my book and I expect to see ES hit 1061 tomorrow. ES is already up ~6 points after hours, but who knows if it will open that high. In the next few days ES will face a backtest of trendline B. This is the crucial make-or-break point for the stock market this year.

If ES fails to break through trendline B then we could be at 1006 soon. However if ES breaks through trendline B then ES is headed back to 1120.

I have mentioned during many pullbacks before that usually the stock market makes W bottoms ie we touched trendline A twice today, which forms a W. I was expecting it to do so, so the first time ES touched trendline A, I bought longer-dated september out of the money calls as opposed to weekly august in-the-money or at-the-money calls. I bought the sept 108s instead of august 105s or 106s because I was expecting the W bottom and also because if ES had crashed straight through trendline A I would take a bigger loss on weekly options than on the monthly ones. If ES touches and holds trendline A again then I will open up some more aggressive weekly option positions.