Trading plan for Nov. 19, 2015

ESZ5 daily chart

ESZ5 daily chart

ES regained control of the key yearly level at 2055. After the FOMC minutes were released, the buyers returned and pushed the price back above 2079 for closing.

The ,message in the FOMC minutes is quite clear. US financial instruments are the safe haven for the world, and the US is the world’s safest investment environment. The effect will be to bring even more overseas money into US markets.

The Fed – so far as the minutes reveal – is clearly getting ready to raise rates, which will keep the US dollar strong for the time being. Now the ES is also getting ready to defy conventional wisdom – higher rates mean lower prices for stocks – and move higher to challenge the next resistance line at 2093.75. A move above 2096.50 will push ES back up to this year’s high.

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Today 2055-56 becomes a major support zone. It has to hold up to support a close for the SP500 cash index above 2075 for option expiration today. Any pullback will be likely bought by shorts covering and new buyers. “Buy on the Dip” will be seen again today.

Outlook

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

Support and resistance

Major support levels: 2050-45, 2030.50-32.50, 2021.50-23.75
Major resistance levels: 2097-95, 2114.50-16.50