Trading plan for March 16, 2016

160315-ES-daily

ESM6 Mar. 15, 2016. Daily chart.

The ES pulled back to test the 10-day moving average yesterday and managed to successfully hold the price above it even though it couldn’t close the gap from the prior day’s close.

Today the FOMC announcement at 2:15 has the potential to rock the price. The narrow range contraction move of the past two days could lead to an expansion move.

The Street does not expect a Fed rate hike this time, but sell-the-news could become the default strategy even if the Fed does – or says – exactly what is expected.

If the Fed does or says something unexpected we could see big whipsaw moves. Watch for changes in the language used in the statement.

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2009.50-2007.50 will continue to be a key zone. A move above it could push price back up to 2015-14 or higher up to 2023.50-21.

A failure to break above 2015 could lead the ES down to back-fill again, which could trigger selling and push the price down near the 1978 area.

Sentiment is still bullish because o the seasonal effects, but the volume on this rally is light and there is a major resistance line ahead. The market may form a short-term top soon.

Outlook

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

Support and resistance

Major support levels: 1960.50-62.50, 1950.50-52, 1928-30
Major resistance levels: 2018.50-23.75, 2033-35.50, 2050-55, 2075-77

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