ESM6 May 10, 2016. Daily chart.
The slow STO indicator moved into oversold territory yesterday and the ES had an oversold bounce in consequence.
The market is attempting to form a right shoulder top near 2080-83.25. The volume was light, but the price action was strong. At the end ES managed to close above the 20- and 10-day ema lines, the previously broken support .
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Today is Wednesday and we expect the ES will try to prevent yesterday’s gap up from being filled. As long as ES stays above the 2061 low from yesterday’s regular trading sessions, the odds will favor an upside move.
But if ES fails to break above 2083.25-85.50 the price still has a chance to pullback again to test the overnight lows at 2054-52.75.
The daily STO indicator remains in an oversold condition, but it gave an ultra-short-term buying signal. Yesterday’s strong trend move could lead to a consolidation move at the high end of the range today. Buy on early weakness and Sell on strength will be seen today.
Outlook
Short-term === Bearish
MEDIUM TERM === Bullish
LONG-TERM === Bullish
Support and resistance
Major support levels: 2035-37.50, 2021-23.50, 2009-07.50, 2000-1997
Major resistance levels: 2085-83, 2099.50-2103.50, 2108-10.50