ES1 (SP500 Generic Front Month) – 8.3.23
*In the last report on 8.1.23 (was off desk yesterday) I noted that the index was churning within a support/resistance range of 4550/4630. The index was churning in this range with “fading volume and flat to negative momentum (M1, M2)”. I also stated at that time that “I see risk here as essentially neutral with a slight negative bias and more price action needed to add to any conviction. I would note that the longer we sit below resistance with fading volume and momentum the more negative that bias will become”. Following this report, the index broke short term support at 4550, hitting a low of 4527. As of this morning the index low is 4510. This is within 10 handles of testing my downside target of 4500 (mentioned in the Jul 28 report). The break of 4550 with a major breakdown in momentum (M1, M2) and a spike in volume suggests that additional downside is likely. At current levels I would be very focused on whether or not 4500 holds.
Trading Support:
- 4500: Previous Resistance; 76.4% Retracement Level
- 4400: Previous Support
- 4300: Previous Resistance; 50dma at 4434
Trading Resistance:
- 4550: Previous short term support
- 4579: 10dma
- 4631: Mar 2022 Peak
