Trading plan for Jan. 13, 2016

ESH6 Daily chart

ESH6 Daily chart

ES continued to have an oversold bounce move yesterday. It managed to hold above the prior day’s low and made higher high price, which looks very positive. But it is not necessarily “bullish”. It only indicates that a pause or consolidation should clear oversold conditions.

The 50/200-day moving average line crossover gets wider, and still points to a bearish outlook. Also both 20/10ema lines chase the declining price, which confirms that the current rally just is a bounce, not a reversal.

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