Trading plan for Sept. 8, 2016

160907-es-daily

ESU6 Sept. 7, 2016. Daily chart.

ES again reacted positively to a negative economic report (the Purchasing Managers Index, PMI), so bad news is good news because it will prevent the Fed from raising rates. They hope.

The ES tried to break out last week’s high 2186.75 yesterday, and ticked around there, but so far has not been able to close above that level.

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The daily range gets narrower and narrower. ES remained inside last week’s range, but is trying to set up higher level range.

Today 2187.50 will be the key line for any upside move. A move above it could push price higher up to 2193.50-94.50.

But as the price approaches the 2200 level, the risk of a pullback will increase.

2175 will be the current support area. As long as it holds up, odds will still favor the upside. The strategy for today: sell on strong rally, and buy on later weakness.

Daily PMO and slow STO will turn up, which indicates the Bulls are taking control. Higher highs should be expected.

However yesterday’s upside momentum was not as strong as before. ES may reverse from new highs quickly due to Rollover day today, but the rollover itself — the process of moving traders from the September to the December contract — may be more gradual than in previous months.

Outlook

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

Support

Major support levels: 2156-54, 2146.50-43.75, 2135-33, 2120-21, 2112-14.50
Major resistance levels: 2193.50-95.75, 2199.50-98.50, 2207.50-05.50

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