Trading plan for June 24, 2016

160623-ES-daily

ESU6 June 23, 2016. Daily chart.

ES rallied above 2100 in the last hour of trading yesterday and stayed above it for closing.

Usually with this kind of continuation bid, following along with the European market and trading above the 2100 level, it would be likely for ES to go to new all-time highs in the following day.

However the ES has made a sharp “ buy-the-rumor” rally that today could be followed by a “sell-the-news” move. The key event is the “Brexit” vote in Britain, which will set the direction for the day.

The final count for the referendum will be released before the market opens this morning and there is likely to be turmoil in a number of markets (gold and FX, for example) before the ES day session begins.

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At the very least expect high volatility: in overnight trading, with the Leave side leading the early results, the ES moved from just under 2120 to just above 2040 in the space of a couple of hours, before quickly recovering 50% of that decline.

2087.50 is a key line today. The ES recovered half of the early decline overnight. If it can not hold above 2087.50 in the day session, the gap at 2076.75 – filled momentarily overnight – is likely to be filled in today’s session.

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

Major support levels: 2062.50-64, 2055.50-53.50, 2043.50-42, 2035.50-32
Major resistance levels: 2114-15.50, 2123.50-21.75, 2135.50-37.50