ESZ5 Daily chart
ES stayed inside the triangle pattern for consolidation yesterday. Both resistance and support lines of that pattern confined the price, preventing it from moving beyond them, which means both buyers and sellers are holding their fire. Everyone is waiting for the Fed..
The Retail Sales report and the Empire State Manufacturing survey will be released in the pre-market before regular hours trading begins. The Street expects the Retail Sales data may influence the Fed’s decision about a rate increase.
We think it doesn’t matter too much. Whatever Fed is going to do, they have already made their decision.
Today the ES could continue to go sideways to wait for the FOMC announcement on Thursday, but there will be rumors and attempts to whip the market around in th meantime.
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From a technical perspective, 1950 will be the line in the sand for the Index. There is heavy Put activity at this strike price. A close below that level could lead the price toward the next heavy Put strike, 1900. Holding above it could lead to short-covering and push the price up. Anything can happen this week. Traders shouldn’t panic about exaggerated moves in either direction.
Outlook
Short-term — Bearish
MEDIUM TERM — Bearish
LONG-TERM — Bullish
Support and resistance
The major support levels: 1900-03.50, 1975-80, 1850-45, 1828.50-25;
the major resistance levels: 1992.75-95.50, 2012.50-2013.50, 2032-2035