8/10: Daily Recap, Outlook, and Trading Plan
Recap
The month of August has seen a shift in trading character, with massive bi-directional swings in the ES. The ES made four full round trips from the 4535+ zone down to the 4480-90 zone since Friday alone. On Tuesday, the ES rallied to 4532 then dipped back down to the 4480-90 zone and held. The 4493-88 zone remains the most important area in ES, as it back-tests the zone we broke out from on July 12th, triggering a 3 week rally. Today is CPI day, which are typically the most volatile and difficult trading days of the year.
Markets Overnight
🌏 Asia: Mostly up
🌍 Europe: Up
🌎 US Index Futures: Up
🛢 Crude Oil: Down
💵 Dollar: Down
🧐 Yields: Down
🔮 Crypto: Down slightly
World Headlines
It’s inflation day. US Consumer Price Index inflation prints slightly below expectations at 3.2%.
Key Structures
The core structure now remains a declining channel in yellow - extending from the July 27th high. This is a bull flag, however, it only becomes one on the breakout. Support of this is now 4475, and resistance will be 4580. Everything inside equals consolidation.
Support Levels
Supports are: 4493-87 (major), 4484, 4475 (major), 4467, 4459, 4453-48 (major), 4438, 4420-23 (major), 4410, 4395-4400 (major), 4382, 4368 (major), 4351, 4340-45 (major), 4327, 4317, 4310 (major).
Resistance Levels
Resistances are: 4508-04 (major), 4521 (major), 4528, 4538-40 (major), 4547, 4559 (major), 4569, 4579-83 (major), 4592, 4598-4601, 4614-17 (major), 4624, 4631, 4639-43 (major), 4647, 4660, 4670, 4677-80 (major), 4692 (major), 4705.
Trading Plan
For CPI days, price can squeeze very hard, through multiple levels so any shorts that are counter-trend must be taken small and at your own risk. The 4538-40 zone remains a strong resistance. If ES were to dip, this is the spot before we head to 4579-83.
Bull case today: We are clinging right to that major 4493-88 support zone right as I write this. As long as this general cluster keeps holding, the bull case is alive and well.
Bear case today: Begins now on fail of 4475. As always - I don’t chase. I’d need to see a bounce there, followed by a base building. Then I’d consider short perhaps 4472.
Wrap Up
CPI day - it is not possible to predict and we can easily see 4300s or 4600s (or absolutely nothing). I’ll be reacting and picking my spots. If today were a normal day, my general lean would be that we would keep defending this 4493 support zone (4475 on any spikes down) then continue the rally to 4509, then onto high 4530s. Dip there before higher. 4475 fails, we sell.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
The month of August has seen a shift in trading character, with massive bi-directional swings in the ES. The ES made four full round trips from the 4535+ zone down to the 4480-90 zone since Friday alone. On Tuesday, the ES rallied to 4532 then dipped back down to the 4480-90 zone and held. The 4493-88 zone remains the most important area in ES, as it back-tests the zone we broke out from on July 12th, triggering a 3 week rally. Today is CPI day, which are typically the most volatile and difficult trading days of the year.
Markets Overnight
🌏 Asia: Mostly up
🌍 Europe: Up
🌎 US Index Futures: Up
🛢 Crude Oil: Down
💵 Dollar: Down
🧐 Yields: Down
🔮 Crypto: Down slightly
World Headlines
It’s inflation day. US Consumer Price Index inflation prints slightly below expectations at 3.2%.
Key Structures
The core structure now remains a declining channel in yellow - extending from the July 27th high. This is a bull flag, however, it only becomes one on the breakout. Support of this is now 4475, and resistance will be 4580. Everything inside equals consolidation.
Support Levels
Supports are: 4493-87 (major), 4484, 4475 (major), 4467, 4459, 4453-48 (major), 4438, 4420-23 (major), 4410, 4395-4400 (major), 4382, 4368 (major), 4351, 4340-45 (major), 4327, 4317, 4310 (major).
Resistance Levels
Resistances are: 4508-04 (major), 4521 (major), 4528, 4538-40 (major), 4547, 4559 (major), 4569, 4579-83 (major), 4592, 4598-4601, 4614-17 (major), 4624, 4631, 4639-43 (major), 4647, 4660, 4670, 4677-80 (major), 4692 (major), 4705.
Trading Plan
For CPI days, price can squeeze very hard, through multiple levels so any shorts that are counter-trend must be taken small and at your own risk. The 4538-40 zone remains a strong resistance. If ES were to dip, this is the spot before we head to 4579-83.
Bull case today: We are clinging right to that major 4493-88 support zone right as I write this. As long as this general cluster keeps holding, the bull case is alive and well.
Bear case today: Begins now on fail of 4475. As always - I don’t chase. I’d need to see a bounce there, followed by a base building. Then I’d consider short perhaps 4472.
Wrap Up
CPI day - it is not possible to predict and we can easily see 4300s or 4600s (or absolutely nothing). I’ll be reacting and picking my spots. If today were a normal day, my general lean would be that we would keep defending this 4493 support zone (4475 on any spikes down) then continue the rally to 4509, then onto high 4530s. Dip there before higher. 4475 fails, we sell.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
