8/23 Daily Recap, Outlook, and Trading Plan
Recap
ES broke its three-day red streak last Friday by putting in a daily bullish reversal candle. This triggered a relief rally that started this week, squeezing 60+ points. Despite the volatility, ES has remained in the same position as it was on Friday/Monday in the 4390-4400 support cluster. The question now is whether ES is building a base for a bottom or setting up for its next leg down.
Market Outlook: Neutral
Premarket
🌏 Asia: Mixed
🌍 Europe: Mixed
🌎 US Index Futures: Up slightly
🛢 Crude Oil: Down
💵 Dollar: Up
🧐 Yields: Down
🔮 Crypto: Up slightly
World Headlines
Slowing European PMI data
Key Structures
The large rising uptrend channel in white connecting the March and May lows failed last Tuesday, causing a 120 point flush. To set a definitive “bottom” this has to reclaim and currently, resistance is way up at 4493. The August high has resistance at 4448-54 and support at 4315. The yellow declining channel from the August high is a failed bull flag with resistance at 4426-29.
Support Levels
Supports are: 4390-92 (major), 4382, 4376, 4370-72 (major), 4347 (major), 4333, 4317 (major), 4311, 4303-05 (major), 4287 (major), 4272, 4265, 4254, 4247 (major), 4230-35 (major), 4220
Resistance Levels
Resistances are: 4400-4405 (major), 4413, 4418, 4426-29 (major), 4448, 4452 (major), 4468 (major), 4474, 4480, 4493 (major), 4512 (major), 4517, 4530, 4538-41 (major), 4549, 4560-62, 4578-80 (major).
Trading Plan
The bull case depends on 4390 holding and as of writing, we are hovering just above. As long as that 4390-4400 battleground holds, the relief bounce that began last Friday is still alive. The bear case begins on the fail of 4390. I’d look to short this. As always, I don’t chase. I’d ideally like to see some sort of final bounce attempt here, then 4388 would trigger shorts.
Wrap Up
ES is at a major inflection point here and is about to make a decision. I am prepared to react accordingly whatever path it chooses. My general lean though is that since 4390 has not failed yet, that ES can try to continue the relief bounce one more time (to 4418, high 4420s). 4390 fails though, we will head to low 4370s which is the last stop before new lows.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
ES broke its three-day red streak last Friday by putting in a daily bullish reversal candle. This triggered a relief rally that started this week, squeezing 60+ points. Despite the volatility, ES has remained in the same position as it was on Friday/Monday in the 4390-4400 support cluster. The question now is whether ES is building a base for a bottom or setting up for its next leg down.
Market Outlook: Neutral
Premarket
🌏 Asia: Mixed
🌍 Europe: Mixed
🌎 US Index Futures: Up slightly
🛢 Crude Oil: Down
💵 Dollar: Up
🧐 Yields: Down
🔮 Crypto: Up slightly
World Headlines
Slowing European PMI data
Key Structures
The large rising uptrend channel in white connecting the March and May lows failed last Tuesday, causing a 120 point flush. To set a definitive “bottom” this has to reclaim and currently, resistance is way up at 4493. The August high has resistance at 4448-54 and support at 4315. The yellow declining channel from the August high is a failed bull flag with resistance at 4426-29.
Support Levels
Supports are: 4390-92 (major), 4382, 4376, 4370-72 (major), 4347 (major), 4333, 4317 (major), 4311, 4303-05 (major), 4287 (major), 4272, 4265, 4254, 4247 (major), 4230-35 (major), 4220
Resistance Levels
Resistances are: 4400-4405 (major), 4413, 4418, 4426-29 (major), 4448, 4452 (major), 4468 (major), 4474, 4480, 4493 (major), 4512 (major), 4517, 4530, 4538-41 (major), 4549, 4560-62, 4578-80 (major).
Trading Plan
The bull case depends on 4390 holding and as of writing, we are hovering just above. As long as that 4390-4400 battleground holds, the relief bounce that began last Friday is still alive. The bear case begins on the fail of 4390. I’d look to short this. As always, I don’t chase. I’d ideally like to see some sort of final bounce attempt here, then 4388 would trigger shorts.
Wrap Up
ES is at a major inflection point here and is about to make a decision. I am prepared to react accordingly whatever path it chooses. My general lean though is that since 4390 has not failed yet, that ES can try to continue the relief bounce one more time (to 4418, high 4420s). 4390 fails though, we will head to low 4370s which is the last stop before new lows.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
