Trading plan for Sept. 9, 2015

The ES surged overnight in reaction to the Chinese government’s latest stimulus plan, gapped up strong at the open, then managed to hold the gain for the day. All the major US market indices had a big green day in yesterday’s trading.

The ES advanced 44 points, moved above its first daily momentum resistance and managed to close above it, which was a bullish price move. But the volume still was lower than last Friday.

We need to see the price action today before we decide if this breakout is real or fake. The ES could rally up further if there is a strong follow-through move today. Without it, it could be the same fake breakout as we saw Aug. 30, followed on Thursday by a retracement back down.

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Today 1950 will be the first support line, but it will also be a battle line if the price pulls back to that level. As long as the ES doesn’t close below it at the end of day, the odds will favor the upside. Buyers will then continue fighting for the overhead resistance levels 1983-88 and 2000 as we approach rollover day for the contract.

Short-term β€” Bearish
MEDIUM TERM β€” Bearish
LONG-TERM β€” Bullish

The major support levels: 1900-03.50, 1850-45, 1828.50-25
the major resistance levels: 1992.75-95.50, 2012.50-2013.50 2032-2035

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