Trading plan for June 16, 2015

150615-ES dailyThe US stock market headed south out of the gate yesterday, pressured by a breakdown in debt talks between Greece and its creditors, as well as disappointing economic reports.

ES broke its short-term uptrend line but managed to hold above the 135-day moving average line. Now the short-term broken uptrend line becomes the current resistance, and Bears will continue to challenge the 135-day moving average line. A break below 2060.50 will lead the ES to drop again toward 2050-55 to test the yearly pivot level or lower if the downside momentum is strong.

The volatility will be high due to the VIX option expiration on Wednesday and the start of the FOMC meeting today and minutes release Wednesday afternoon. If VIX falls below its heavy put strike price – around 14 – institutional traders will keep shorting future contracts as a hedge.

This could lead the price to move sharply down. But if the market reacts positively to FOMC news/rumors it could produce potentially powerful short-term rallies. The opposing forces will bounce the market around, but as usual the Fed will be driving the market.

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

The major support levels: 2062-59.50, 2053-50.50, 2043-42
the major resistance levels: 2106-07, 2116-18.50, 2123.50-2121.75 and none

To download the full trading plan with the buy/sell numbers. follow this link: 150616-plan

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