ES1 (SP500 Generic Front Month) – 7.28.23
In the last report on Jul 20 (took some time off for vacation), with the Index at ~4600, I stated that “I think the Index could easily take a breather here and test the 10dma (ref 4526) which is ~1.5% below the current Index price”. On Jul 24 the 10dma had risen to 4551 and it was indeed tested as the Index retraced and hit a low that day of 4560. I had maintained that the next upside target was 4631 which marked the Mar 2022 peak. During yesterday’s session the Index overshot this target by just 3 points hitting a high of 4634 and then reversing aggressively, selling off 80 points to a low of 4553. That price action could not have been more in line with our expectations. Note momentum (M1, M2) is negative and degrading. I think at this point we are watching for yesterday’s low to hold and, if it doesn’t, 4500 will become an easy downside target in the short term. I will continue to look for these tests of support and will focus on the internals as they play out.
Trading Support:
4579: 10dma
4500: Previous Resistance; 76.4% Retracement Level
4400: Previous Support
4300: Previous Resistance; 50dma at 4404
Trading Resistance:
4586: Feb 2022 Double Top Peak
4631: Mar 2022 Peak
