Trading plan for May 21, 2015

150520-ES-dailyES made a new intraday high for the regular day-session trading, but again it sold off right after it made the new highs (at 2132.25) and closed with a loss yesterday. The decline continued after the market closed.

The FOMC minutes showed there are few members who favor of hiking the interest rate. The market is now convinced the Fed will not hike in June, and may delay until Sept or until next year. That wasn’t enough to move the market higher.

The favorable season for stocks is ending, and “Sell in May and Go away” thinking encourages more buyers to lock in profits and walk away.

Even though the ES pushed up to make new highs, the lack of upside momentum and sluggish volume didn’t support the breakout. Eventually selling at the top, which is what we saw in the past two days, pushed the price back down.

Today 2119.75-2115 will be the key ara. A move below 2114.50 level could trigger selling and push the price further down toward 2106-03 zone to test the psychological support at 2100.

Holding above 2114 could lead to a retest of yesterday’s high area, which will be a short entry for us. The 2134-32.25 zone could easily be the short-term top, and the swing short entry we have posted in our chat room for more than two months.

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