Trading plan for Jan. 7, 2016


ESH6 Daily chart

ES had a strong gap down at the open in reaction to he North Korean Bomb test and other overnight news. The price not only broke the 1991-83.25 December support zone, it also closed under it.

Even though the fund managers put some money top work in the last half hour of trading, and managed to push the price back to 1983.25 for the close, it still hasn’t changed the short-term bearish outlook.

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Today 1993.75-95.50 will be the first key resistance zone to watch. A failure to move above it will encourage the bears and bring more sellers into the market.

The ES daily chart is little different from the SP500 cash daily chart. But the latest bounce still should be considered as a channel bounce. The ultra-short-term indicators remain oversold, but the intermediate-term indicators have some room before they get into oversold territory. We may see a brief bounce today.

2000 is the option line for Friday’s expiration. Also the Non-farm payroll report will be out tomorrow morning. ES may push up further toward 2005-1998.50 zone to raise the premium on the weekly Calls if 1982-83 zone holds up in overnight trading. Otherwise ES could continue to whipsaw inside yesterday’s range and try to go lower.

However today’s low or tomorrow’s, whichever is the lower, could be the low for the January option week (next week


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

Support and resistane

Major support levels: 1970.50-72.75, 1962.50-59.50, 1948.50-45.
Major resistance levels: 2005-98.50, 2014.50-17, 2037.50-39.50, 2056.50-57.50


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