Trading plan – Oct. 20, 2015

151019-ES-daily

ESZ5 Daily chart

ES spent most of the day in the red moving back and forth along the 2023.50 line. A late afternoon rally allowed it to eke out a modest gain for the close.

ES has already had two relatively narrow range days. Should we be looking for a trend day today? Maybe.

We have the Fed talking again, with William Dudley and Mrs. Yellen both speaking during the morning session. The market never seems to get tired of hearing the Fed speak, and either or both could cause some movement in either direction.

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Right now we are only a few points away from the 2033-41.75 zone, and if/when we reach that level we could see some profit taking by the buyers. On the downside, there is the 10ema line for support around 2005-03.

If ES goes up first, ultra-short-term swing traders may step in to short positions at 2033-41.75 with a target around yesterday’s low area at 2014. If ES goes down first, use a scalping long side entry around the 2000 level with tight stops.

MACD indicator has a bearish divergence with price. ES could attract some sellers if price goes up further.

Outlook

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

Support and resistance

The major support levels: 1985-87.50, 1950-56,1928-29.50, 1900-03.75
the major resistance levels: 2035.50-32, 2042-40.50, 2050-46.50