ESM6 May 12, 2016. Daily chart.
ES rallied in overnight trading, and gapped up at the open, but failed to hold up the strong early gain. At the end it only had a gain of 0.75 points higher than yesterday’s close.
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ES struggled and went sideways between the 20- and 50-day moving average lines. This consolidation behaviour suggests neither side was willingly to give up. Both sides are waiting for somethings to happen.
The PMO indicator still chases the downside move and STO indicator is in the neutral area. Maybe today it could move into overbought territory or give a sell signal soon. This chopping back and forth is not something traders on either side want to see.
Today is the Friday option expiration. The 2050 strike price will be the battlefield for the option game. Holding above it could push the price up to test 2072.50-73.25 or higher up to 2078.50-77.50.
Failing to hold above 2048.50 could trigger selling and push the ES down toward 2039-37.50 or lower for testing.
If we don’t break either the top at 2079.75 or the low at 2048.50, we could see ES continue to chop back and forth around the 2055-50 zone.
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