Trading plan for Jan. 15, 2016

ESH6 Daily chart

ESH6 Daily chart

ES rebounded from the intraday low at 1871 and closed up by 33 points yesterday. The volume increased by 5% more than the previous day’s volume. But the price has no new low bottom yet.

Based on the daily chart, ES traded above last September’s low. The short-term oversold condition suggested profit taking. But price remains under the 10/20 ema lines. The pattern still looks bearish. We may see one or two extra days bounce until the short-term oversold condition gets totally solved.

Member content

Download the full trading plan here: 160115-plan

Today is ES option expiration. 1929.50 line will be the first line to watch carefully. This line controls the upside movement. A move above it could continue to squeeze shorts and push price up to 1939-43 or higher up to 1955-57.50 zone (if upside momentum is strong). Holding under 1929.50 could lead the ES to pullback to test yesterday afternoon’s breakout level 1902.75-06.25. A break below 1895.50 will be bearish again. A further decline should then be expected.

Outlook

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

Support and resistance

Major support levels: 1866-62.50, 1856-50.25, 1830-25, 1800-1795
Major resistance levels: 1929.50-32.50, 1956.50-57.50, 1970-65.50