Trading plan for Nov. 17, 2015

ESZ5 daily chart

ESZ5 daily chart

ES had a big gap down in the overnight trading. But it was fully recovered when the market opened. There were several signs pointing to a decline in the morning session, but PPT support overcame all of them. The price was pushed back above last Friday’s high for a higher closing. We had a great patriotic rally, as we predicted in yesterday’s trading plan.

Today is the market volatility index option expiration day. In order to maintain the low level closing on the $VIX, the market has to hold up until today’s close. It is likely for ES to chop in a sideways zone from 2055 to 2030. But any external event will continue to move the market.

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Download the full trading plan here: 151117-plan

Today the major line is 2055, the yearly pivot line. A stay under it could lead ES to pull back into 2039.50-38.50 or lower to 2031.75-30. A break below 2028.50 will be bearish. It is then likely for ES to go down further to 2023.50-21.75 to test yesterday’s support zone again. A move above 2056.50 will be bullish. A further rally to 2063.50-69 zone should then be expected.

Yesterday 420K PPT contracts exited in the last minute on the Globex closing. Will those contracts come back to support the ES again today? Nobody knows. But the best course today is to follow the market step-by-step and be prepared to reaction quickly to events as they develop.

Outlook

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

Support and Resistance

Major support levels: 2035.50-32.50, 2025-23.75, 2016-14, 2008-07.50
Major resistance levels: 2075-78.50, 2097-95, 2114.50-16.50, 2112.75-23.50