Trading plan for Aug. 31, 2016

160830-ES-daily

ESU6 Aug. 30, 2016. Daily chart.

ES failed to move above 2183.50 level, but instead it did its back-fill move again by filling the 2168.50 gap. It closed at 2175.25, still slightly above the 20-day moving average line.

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Today is the last day of August. Our systems indicate that the 2175-74 area should be the monthly closing price. That zone will act as a magnet to correct small price movements. However there is the possibility news events or other activity could lead to unbalanced trading, which will pull the price further from our expected close.

This morning the ADP employment report will have some influence on the market. The oil report, which will be released later in the session may also drive the price.
Most traders will focus on the employment report to be released Friday.

ES has some a minor ultra-short-term overbought condition. The internal strength was weak. But as long as ES stays above 2165.50, the odds will continue favoring the buying side.

A move below 2162.50 could send the ES down to retest the 2156.50-57.50 zone or lower. A move above 2183.50 level could run stops and push the price up to test the 2190.50-87.50 area.

Outlook

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

Support and resistance

Major support levels: 2162-64, 2152-54, 2120-21, 2112-14.50
Major resistance levels: 2193.50-90.75, 2195.50-97.50, 2202.50-05.50