ES continued doing its back-fill on the last day of August. At the end it still managed to close above 2165.50 level, but under the 20-day moving average support level.

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Now August is behind of us. For the first day of September ES could move up to retest last Friday’s high 2178-81 zone or higher.

But it also could move down first to retest 2141.50, the August low, if it successfully breaks below 2155 level.

Due to the long-term overbought condition in the ES, the ability to move back up will be limited before the Sept 5 Labor Day holiday. Any bounce may just be the result of some shorts covering before Friday’s NFP report.

Based on the daily PMO indicator pointing on the down side and the slow STO indicator reluctance to move up, the internal strength should be weak.

Therefore, focus on the short-side on any early rally, and buy later on weakness for scalping trades.

Outlook

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

Support and resistance

Major support levels: 2156-54, 2135-33, 2120-21, 2112-14.50
Major resistance levels: 2193.50-90.75, 2195.50-97.50, 2202.50-05.50