The US stock market was cautious ahead of today’s FOMC meeting minutes. The three major indices were all down, under pressure from a lower earning outlook for Wal-Mart Stores and the continuing sharp declines in the Chinese market overnight. Housing starts were better than expected, but that wasn’t enough to contain the damage.
Technically speaking, the ES didn’t change very much yesterday. The price continues traveling inside the triangle pattern and still wasn’t able to break either the resistance or the support line. Now the 10/20/40 day moving average lines overlap each other; we see this as a hint that the ES is not too far away from its breakout move.
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The FOMC minutes could help the ES make its decision on which direction to break. A move above 2106.50 could trigger an upside run and push the price up to 2112.50-14.50 or higher up to 2126.50-25 area. A break below 2083-85 zone could push price back down to test the low band of the triangle pattern at 2065-70. There is also a chance for ES to continue going sideways to kill time for this week. If this is the case, next week the bear may sit in the driver’s seat.
Short-term === Bullish
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