ESZ5 daily chart

ES declined sharply in overnight trading and moved further down after the open. It wiped out Monday’s gain and went further south in response to declining European markets and weak US economic reports.

Now ES is moving away from the 10-day moving average line again. The price broke below 1927.25 during the day, but managed to move back up and close above that level.

1927.25 could still be the key line to watch today. If we see a move below it, there is a chance for ES to move below Tuesday’s low.

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Today in the early session we may see a continuation move down if ES remains below the 1937.50-39.50 zone. The ES intends to make a weekly low today or early tomorrow morning, but the 1900 level is a psychology support. ES is expected to hold above 1900-1898 zone for this week.

Therefore our traders need to pay attention to any move by the ES near the 1900 level, where the swing shorts who entered at 1961.75-60 will step in and start taking profits, likely halting the decline. For the time being.

Outlook

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

Support and resistance

The major support levels: 1900-03.50, 1975-80, 1850-45
the major resistance levels: 1998.75-95.50, 2012.50-2013.50 2032-2035