Trading plan for Oct. 19. 2016

161018-es-daily

ESZ6 Oct. 18, 2016. Daily chart.

ES gapped up at open, but found its resistance line at 2139.75. At the end, it closed under its open by 5.25 points. The trading volume remains low on the rally day, which indicates there is a great chance for ES to do backfill today by pulling back down to fill yesterday’s gap at 2123.

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Daily PMO indicator decelerated yesterday. The slow STO indicator has an oversold bounce. Should the rally continue as those indicators suggest, overhead resistance line is around 2145-50, which is not a long way to go. If there is a follow through, ES could do it for Wednesday option expiration.

Today 2126.25 will be the key. Holding above it could push ES back up to yesterday’s high for testing or higher if the bulls pick up any steam. A break below it could be bearish. Yesterday’s gap at 2123 could be the downside target.

Outlook

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

Support and resistance

Major support levels: 2112-14, 2106-03.50, 2098-01.75
Major resistance levels: 2156.50-55.50, 2164-62.50, 2171-72.50