8/18 Daily Recap, Outlook, and Trading Plan
Recap
The bears had their first major technical win since mid-February, breaking the perfect rising trendline from the March lows. This has triggered a "sell the bounce" theme with the bulls struggling to put in green days in August. The question now is whether there is a relief bounce on the horizon.
Premarket
🌏 Asia: Down
🌍 Europe: Down
🌎 US Index Futures: Down
🛢 Crude Oil: Down
💵 Dollar: Up slightly
🧐 Yields: Down
🔮 Crypto: Down
World Headlines
Major Chinese property developer Evergrande is back in the news, this time filing for Chapter 15 to protect it during restructuring.
Key Structures
The declining channel extending from the July 27th high broke down on Tuesday, starting the cascade lower. The large rising uptrend channel, which connects the March lows and the May lows, also failed late Tuesday. This was the first technical success bears have had since March.
Support Levels
The most immediate major support that failed is now the immediate squeeze trigger on the reclaim of 4404. Other support levels include 4369 then 4340-45.
Resistance Levels
The backtest of the declining channel is now 4438 and was where we rejected yesterday. To set a "bottom", the large rising uptrend channel has to reclaim and currently, resistance is at 4480ish. The 4463-66 level we broke down from on Tuesday would likely also count as an early reclaim and is also significant.
Trading Plan
The plan for today is to continue to sell the bounce. A sustained bounce will only come when a resistance clears. The two big ones are now 4393 then 4404. A short squeeze could occur if we can reclaim that 4404.
Wrap Up
Bears remain in control. The general lean is that ES can test 4369 next level down, then perhaps try another sustained bounce there and if it can’t reclaim 4393 then 4404, we simply continue lower down to 4340. A squeeze could occur above 4404.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
The bears had their first major technical win since mid-February, breaking the perfect rising trendline from the March lows. This has triggered a "sell the bounce" theme with the bulls struggling to put in green days in August. The question now is whether there is a relief bounce on the horizon.
Premarket
🌏 Asia: Down
🌍 Europe: Down
🌎 US Index Futures: Down
🛢 Crude Oil: Down
💵 Dollar: Up slightly
🧐 Yields: Down
🔮 Crypto: Down
World Headlines
Major Chinese property developer Evergrande is back in the news, this time filing for Chapter 15 to protect it during restructuring.
Key Structures
The declining channel extending from the July 27th high broke down on Tuesday, starting the cascade lower. The large rising uptrend channel, which connects the March lows and the May lows, also failed late Tuesday. This was the first technical success bears have had since March.
Support Levels
The most immediate major support that failed is now the immediate squeeze trigger on the reclaim of 4404. Other support levels include 4369 then 4340-45.
Resistance Levels
The backtest of the declining channel is now 4438 and was where we rejected yesterday. To set a "bottom", the large rising uptrend channel has to reclaim and currently, resistance is at 4480ish. The 4463-66 level we broke down from on Tuesday would likely also count as an early reclaim and is also significant.
Trading Plan
The plan for today is to continue to sell the bounce. A sustained bounce will only come when a resistance clears. The two big ones are now 4393 then 4404. A short squeeze could occur if we can reclaim that 4404.
Wrap Up
Bears remain in control. The general lean is that ES can test 4369 next level down, then perhaps try another sustained bounce there and if it can’t reclaim 4393 then 4404, we simply continue lower down to 4340. A squeeze could occur above 4404.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
