$SPX $ES_F Monthly FVG Filled

So what could be next?

We’ll get to today’s levels after a quick look at $SPX. The first thing that I want to remind everybody about, is this monthly liquidity void. I like to call them J-Gaps, but since a majority of people only knows them as fair value gaps, I figured to just refer to them as such. I don’t see this as a fair value gap, however, to me this is a liquidity void, and the price has behaved inside it, simply confirms that that is what it was.

Liquidity voids have no levels to trade against, and price only meets local resistance at lower timeframes, where price took a pause in trend on the way up. Price took pauses in trend also there on the way down, but none of these levels was strong enough to put in a reversal.

The idea behind a liquidity void is simple: institutional traders don’t chase.

Now, I have no idea if the market is going to crash today. I only deal in probability. If I study the current setup, then I would say the market is correcting. Crashing is something else.

What I see is a beautiful flag. Market symmetry is in play, as price touched the parallel trend line and bounced.

The trend leg from the top of the flag to the bottom, has two bases, two pauses before continuation. We should always count the originating point, the start of the move, as base number 1. That means that as soon as price confirms a bottom here, it would either V-Shape (unlikely, as this kind of expansion has to lose momentum first), or it will make a base.

If we get base, if it is of the same size as the previous pauses in trend, be careful when you take it short. A break out of a larger base is a consolidation on a higher degree (timeframe).

Below is a detailed chart of the immediate structure. My principle with flags is that a break above the knee of the second correction is the entry, while sniper entry should be forming at the bottom.