ES fluctuated yesterday to form a long doji, but it was just a bounce from last year’s support zone. Every gain made on the bounce couldn’t be held up very long. At the same time there was no confirmation that the price is posting a bottom.
Based on the daily chart, ES has a short-term oversold condition. We may see a few days of sideways movement until the oversold condition gets totally solved.
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Today the 1985.50 line remains a key line for trading. A move above it could lead ES back up to yesterday’s high area 1903.50-07.50 zone or slightly higher to 1916.50-14.50 zone to run some stops.
Holding under 1985.50-87.50 could give traders the impression the ES still has some room on the downside. Aggressive sellers may push the price back down yesterday’s low area again.
A break below 1849.50 will be bearish. A further decline toward 1831-33 zone for back fill should then be expected.
Earning season moves into full gear this week with reports for both Q4 and the 2015 year. The Street whispers that earnings are disappointing and the market may get whipped around as a result.
Short-term === Bearish
MEDIUM TERM === Bearish
LONG-TERM === Neutral
Support and resistance
Major support levels: 1830-1825, 1816-1818, 1800-1795
Major resistance levels: 1929.50-32.50, 1956.50-57.50, 1970-65.50