What you need to know
ES1 (SP500 Generic Front Month) – 7.12.23
*I realize how monotonous the last few weeks of reports have been. I have continued to repeat a few major points.
– First, 4500 was our ultimate upside target for the rally/breakout above 4200 back in the beginning of June.
Also, the 4500 level is major resistance and represents the 76.4% retracement level for the entire peak-to-trough move (Jan 2022 – Oct 2022).
– Second, momentum (M1, M2) on both tests of 4500 (A, B) have diverged negatively from price suggesting that higher prices are not likely.
– Third, I have continued to target the 10dma, 4400 and 4300 as likely downside targets.
The question now is will we see a third test of 4500 and failure (C?) or will the Index press through with enough improvement in momentum to make it count. As of this morning, I continue to see the next move for the Index as down. I continue to see 4500 as solid resistance which will hold and, based on the structure, continue to see 4300 as a solid downside target for the near term. If this changes I will shift and set up for upside targets above 4500 but for now this is not the higher probability move.
Trading Support:
- 4400: Previous Support; 10dma at 4460
- 4300: Previous Resistance
- 4200: Previous Resistance; 50dma at 4299
- 4100: Key Level; Previous Support/Resistance
Trading Resistance:
- 4500: Previous Resistance; 76.4% retracement level
