Trading plan for July 27, 2016

160726-ES-daily

ESU6 July 26, 2016. Daily chart.

ES remained within the prior day’s consolidation range yesterday, and tried to shake out the weak hands on both sides. At the end, there was only a one-point gain on the closing.

Beyond all the economic and earnings reports due today, the central banks are back in the spotlight. FOMC policy announcement will be at 2pm. The statement will largely influence the market movement.

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Yesterday’s trading range will be the key range for today. A breakout of the top line 2168-69.50 could lead ES to move higher to 2178-82.50 or further to 2188-90.50 if upside momentum is strong.

But there is a chance to see a “sell the news” move if ES goes under 2152.75. ES could go down further toward 2146 and 2135.50-39 zone before the buyers step in and push price back up.

The daily PMO indicator seems to form a top pattern, which suggests that a short-term correction may occur.

Outlook

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

Support and resistance

Major support levels: 2150-46, 2120-21, 2112-14.50, 2100-1997.50
Major resistance levels: 2179-78.50, 2188.50-87, 2195.50-93.50

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