Trading plan for April 6, 2016

160405-ES-daily

ESM6 April 5, 2016. Daily chart.

ES gapped down in reaction to overnight comments from the Bank of Japan about the possibility of negative rates. After the open the market tried to move up, but failed. Nevertheless it managed to hold above the 2035.50 support line for closing.

There was lots of struggle in the market yesterday. The ES traded under the 10-day ma and above 2035.50 for most of day. Based on the closing price, ES gave the earliest selling signal for the ultra-short-term. The PMO indicator fast line also turned down and hints it may give a short-term selling signal soon.

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Today 2033.50-35.50 will be a key zone. If overnight trading holds above it, ES could bounce back up to yesterday’s high or higher to 2052.75-54.50 in an attempt to fill yesterday’s unfilled gap.

If it fails to hold up, ES could go lower toward 2023.50-20.50 or lower toward the 2013-09 zone.

Yesterday’s unfilled gap is very important for short-term trend. If it remains unfilled it will give odds that a short-term minor correction may be on the way soon, and then the 200-day ma will be the next reasonable target.

Outlook

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

Support and resistance

Major support levels: 2021-23.50, 2000.50-03.50, 1980-75.50
Major resistance levels: 2064-62.50, 2075-77, 2085-88, 2098-2100

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