Will ES go more deeper ?

The E-mini S&P 500 futures contract (ES1!) exhibited a liquidation profile (Profile A), characterized by two distinct distributions. The subsequent session (Profile B) formed a balanced profile and remained entirely below the lower distribution of Profile A, indicating continued bearish sentiment.

Profile C emerged as a short-covering profile, with its upper boundary testing the high of Profile B by a minimal margin. Both Profile B and C exhibited trading activity around the lower distribution of Profile A without breaching its low. Profiles A, B, and C established a base at the C Line, identified as a longer-term support or demand zone.

Yesterday's session (Profile D) also presented a liquidation profile, briefly trading below the C Line before recovering and maintaining balance around this level. The market demonstrates reluctance for further downside, with lower prices consistently triggering short-covering rallies rather than initiating new selling. Even though Profile D traded lower, it did not exhibit significant selling conviction.

Given the prevailing geopolitical risks, including the ongoing tariff disputes and the unresolved Ukraine-Russia conflict, further liquidation during today's Regular Trading Hours (RTH) remains a possibility.

However, sustained buying interest above the balance of Profile C, driven by short covering and new long positions, would indicate a potential shift in market sentiment towards accumulation on a higher timeframe. The market's behavior during today's RTH session will be crucial in determining the next directional move.