Trading plan for Dec. 9, 2015

151208-ES-daily

ESZ5 Daily chart

The ES dropped about 25 points in overnight trading, rallied back 20 points once the day session opened, then gave back about half of the recovery to close almost 23 points below the previous close. It was the second consecutive losing day, but the ES managed to hold above 200 sma for closing. The continuation selling was related to weak oil prices. .

The contract rollover already started yesterday, and today more and more people will move from the December contract into the March contract. This could make price movement more choppy and unpredictable in both directions.

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Today ES could have a bounce day as long as overnight trading holds above the 2057.50 level. But yesterday’s high around 2075-73.50 (in the regular trading session) will be the first resistance zone, followed by the 2081-84.50 area

In any event today 2078.50 is a very important line for any upside move and 2048 is a key line for any downside move

  • A move above 2078.50 could trigger a short squeeze and push price back up to 2081-2084.50 or 2090.50-88.50.
  • A move below 2048 line could trigger lower sell stops and lead the price lower to 2043-39.50 zone.

The 2040 low created on Dec. 3 hasn’t been tested yet. At some point this level will be retested again. Because the ultra-short-term is oversold, today a bounce is likely But as soon as the oversold condition is corrected, we should expect the pull-back to continue.

Outlook

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

Support and rsistance

Major support levels: 2050-45, 2030.50-32.50, 2019.50-22.50
Major resistance levels: 2088-89.50 2105-08, 2114.50-16.50, 2121-23.50