Trading plan for July 28, 2015

150727-ES-DailyES took a big hit from the massive overnight decline in the Chinese market. All three major indexes suffered losses yesterday. The growing fear about waning demand in China also drove oil down, in addition to US blue chips.

ES dropped to just above our yearly pivot level around 2055, but managed to move up a little for closing. Today is the first day of the two-day Fed meeting. ES may stay low until tomorrow’s Fed announcement.

On the daily chart, the 20-day moving average crossed below the 40-day ema line to give a selling signal but without final confirmation.

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Today the 2069.50-2070.50 zone will be a key area for the ES. A move above that zone could lead the ES back up to fill the air pocket around 2080.75-2078.50. Remaining below that level will probably lead to a repeat of yesterday’s regular trading range and a struggle to go lower.

The sharp decline in the Chinese market gives the Fed a dilemma to solve. They say they want to raise rates; but an increase while an important overseas market is crashing could directly cause our market to have a big swing again.

Short-term — Bearish
MEDIUM TERM — Bullish
LONG-TERM — Bullish

The major support levels: 2054-55, 2035-32, 2025-23.50, 2018.50-16.50
the major resistance levels: 2128.50-29.50, 2134.50-36.50 and none

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