The US stock market posted solid losses yesterday as investors got mixed signals from the Fed over the possibility of an interest rate hike in September.

ES attempted to fill its gap at 2094 after Fed leaked its minutes ahead of the scheduled time. If that was intended to goose the market, it failed. The ES sold off into the close, losing 21.25points for the day, but closed right on the 200 day moving average line.

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The price action on closing was bearish. The total volume increased by 50% over Tuesday’s volume. Today we expect the ES to have a brief consolidation to hold price up to help SP500 index close above the 2065 level at option expiration day.

ES could remain inside triangle pattern range from 2090.50 to 2055 but price could be very volatile like yesterday. Every time ES moved up to the top or bottom line of the triangle formation, the momentum disappeared the following day. So far we don’t know which direction ES will breakout. But that breakout is not far away. Once ES gives out a clear breakout direction, we will follow that direction.

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

The major support levels: 2054-55, 2035-32, 2025-23.50, 2018.50-16.50
the major resistance levels: 2128.50-29.50, 2134.50-36.50 and none

 

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