Trading plan for May 27, 2016

160526-ES-daily

ESM6 May 26, 2016. Daily chart.

ES had a third consecutive gain yesterday, but the volume was the lowest this month and the trading range was the narrowest in this month. That suggests momentum is fading for the rally.

The breakout zone 2077.25-79.75 remains as key area today. The buyers prevent the ES from closing under 2075.

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Because the narrowest range occurred yesterday, a momentum breakout move could be seen today.

A break above 2093.50 triggers an upside move and pushes the price up to 2101.50 or higher up to 2110-12.50 if the reaction to today’s GDP report generates strong momentum.

A failure to breakout above 2093.50 but instead a break below yesterday’s low at 2082.50 could ignite a downside stop run and push the price down to fill the 77.25-75 gaps.

However the short-term outlook is bullish and a buying signal from the daily PMO indicator is pending.

Today the ultra-short-term overbought condition may slow down the speed of the rally.

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

Major support levels: 2055.50-57, 2035.50-37, 2028.50-31.50, 2021-23.50
Major resistance levels: 2099.50-2103.50, 2112.50-10.50