Trading plan for Oct. 16, 2015

ESZ5 Daily chart

ESZ5 Daily chart

Wednesday the ES successfully tested the 1985 level and bounced from it in overnight trading prior to yesterday’s open. Thursday the market stalled in a relatively narrow range all morning; but shortly after the European close it turned around and rocketed straight up 35 points into the close.

Price action was bullish – five consecutive green hourly candles, nothing red all afternoon. The Fed did a great job to promote the price.

Today is October option expiration. ES will try to hold up until Cash index options settle at 9:45am first. After that ES can go up or down without constraint.

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The 200-day moving average line above the current price,at 2025.50 will be an important line.If it is broken, it could create a strong bullish move and push ES higher up to 2033-35 zone to test the Aug 24 broken support zone.

A failure to break out, but instead a move under 1995.50 will be bearish. A further decline toward yesterday’s Globex low could be seen. But expect to see buying on the dips if ES drops near 1989-85 zone.

Outlook

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

Support and resistance

The major support levels: 1928-29.50, 1900-03.75, 1880-75, 1850-45,
the major resistance levels: 2025-32, 2042-40.50, 2050-46.50