8/14: Daily Recap, Outlook, and Trading Plan
Recap
July, the second most bullish month of the year, saw three consecutive weeks of growth, rallying 220 points. August started with the first red week in three, followed by a more turbulent descent this week. However, August is traditionally a consolidation month, with a 0.1% average return over the past 20 years. This pattern of a choppy first half and stronger second half has been evident this year, with ES making slight new lows then squeezing all week.
Markets Overnight
🌏 Asia: Down
🌍 Europe: Down
🌎 US Index Futures: Down
🛢 Crude Oil: Down
💵 Dollar: Up
🧐 Yields: Up
🔮 Crypto: Up
World Headlines
Renewed concerns about the health of China’s economy as it’s largest private wealth manager missed payments
Key Structures
The core structure is a declining channel in yellow, extending from the July 27th high. This is a bull flag, however, it only becomes one on the breakout. Patterns exist only as probabilities until they confirm. Support of this is now 4465, and resistance will be 4580. Other important structures include the major June/July resistance that started the current leg up, shown in purple below, and the large rising uptrend channel in white, which connects the March lows and the May lows.
Support Levels
Supports are: 4480, 4474, 4464 (major), 4457 (major), 4448, 4435, 4426 (major), 4410, 4395-4400 (major), 4388, 4380, 4367-70 (major), 4350, 4339, 4322, 4305-10 (major), 4288 (major).
Resistance Levels
Resistances are: 4493-88 (major), 4500, 4509 (major), 4518 (major), 4532, 4545 (major), 4555, 4564, 4568-71 (major), 4580, 4587-92 (major), 4607 (major), 4618, 4633, 4644 (major), 4665, 4670, 4681-84 (major), 4692, 4704 (major), 4724, 4733 (major), 4750-55, 4770 (major).
Trading Plan
The bull case today depends on the 4457 zone holding, and ideally, it does not even test again. An ideal bull case would look something like ES continuing to base between 4475 and 4488-93, then pushing up to 4509, 4518, then dipping again before tackling 4545. The bear case begins on the fail of 4457. Shorting here is a break-down trade, which requires a good read of the price action to execute well.
Wrap Up
We are currently in a choppy phase. The loose lean is that we can continue to base above the 4457 level and below 4492, then try to push up the levels again to 4509 then 4518. A dip there is likely. If 4457 fails, shorts trigger for a large leg down - and this leg could last days.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
July, the second most bullish month of the year, saw three consecutive weeks of growth, rallying 220 points. August started with the first red week in three, followed by a more turbulent descent this week. However, August is traditionally a consolidation month, with a 0.1% average return over the past 20 years. This pattern of a choppy first half and stronger second half has been evident this year, with ES making slight new lows then squeezing all week.
Markets Overnight
🌏 Asia: Down
🌍 Europe: Down
🌎 US Index Futures: Down
🛢 Crude Oil: Down
💵 Dollar: Up
🧐 Yields: Up
🔮 Crypto: Up
World Headlines
Renewed concerns about the health of China’s economy as it’s largest private wealth manager missed payments
Key Structures
The core structure is a declining channel in yellow, extending from the July 27th high. This is a bull flag, however, it only becomes one on the breakout. Patterns exist only as probabilities until they confirm. Support of this is now 4465, and resistance will be 4580. Other important structures include the major June/July resistance that started the current leg up, shown in purple below, and the large rising uptrend channel in white, which connects the March lows and the May lows.
Support Levels
Supports are: 4480, 4474, 4464 (major), 4457 (major), 4448, 4435, 4426 (major), 4410, 4395-4400 (major), 4388, 4380, 4367-70 (major), 4350, 4339, 4322, 4305-10 (major), 4288 (major).
Resistance Levels
Resistances are: 4493-88 (major), 4500, 4509 (major), 4518 (major), 4532, 4545 (major), 4555, 4564, 4568-71 (major), 4580, 4587-92 (major), 4607 (major), 4618, 4633, 4644 (major), 4665, 4670, 4681-84 (major), 4692, 4704 (major), 4724, 4733 (major), 4750-55, 4770 (major).
Trading Plan
The bull case today depends on the 4457 zone holding, and ideally, it does not even test again. An ideal bull case would look something like ES continuing to base between 4475 and 4488-93, then pushing up to 4509, 4518, then dipping again before tackling 4545. The bear case begins on the fail of 4457. Shorting here is a break-down trade, which requires a good read of the price action to execute well.
Wrap Up
We are currently in a choppy phase. The loose lean is that we can continue to base above the 4457 level and below 4492, then try to push up the levels again to 4509 then 4518. A dip there is likely. If 4457 fails, shorts trigger for a large leg down - and this leg could last days.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
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