Trading plan for April 27, 2016

160426-ES-daily

ESM6 April 26, 2016. Daily chart.

ES made an inside day yesterday. It tried to hold up above 2080 and below 2091.50 by going sideways to kill some time and wait for today’s Fed policy announcement.

The market expects NO RATE HIKE this time, but any language in the Fed statement about a possible rate hike in the coming months could influence the price move in ultra-short time the frame.

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For the upside, ES has to break through the 2095.50-93.50 zone to move back to re-test the 2105-03 range.

For downside, ES has to break below 2065 level to go lower. Failure to break either the overhead resistance or below the support line will lead the ES to have a big whipsaw move after the Fed rate announcement.

Based on recent price movement, the market’s dependence on Fed announcements is nearly compete. Any rate hike – or credible talk about a rate hike – could come with violent consequences.

As long as the Fed keeps monetary policy accommodating, the markets will continue to rally. But when the easy money stops …

Outlook

Short-term === Bearish.
MEDIUM TERM === Bullish
LONG-TERM === Bullish

Support and resistance

Major support levels: 2050-52, 2039-37.50, 2021-23.50, 2009-07.50
Major resistance levels: 2098-95.50, 2108-10.50, 2116.75-19.00, 2135-30

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