ES1 (SP500 Generic Front Month) – 8.30.23
*The index has now rallied over 3% off the Aug 18 reversal call low of 4350 and has broken above all three of our identified resistance levels. These levels again were the 10dma (R10), 50dma (R50) and 4500 (R4500). In addition, momentum (M1) has shifted to positive confirming there may be some more upside left on this move in the near term. All in, price needs to hold 4500 with expanding momentum. If this level can hold, I would expect price to continue to rise from here and test 4600 resistance in the short term. I will continue to watch price action and internals as this move progresses.
Repeat: As a very important note, the longer term set up for the index is shifting to negative as momentum for the Weekly period has shifted to negative for the first time since Nov 2022. In my opinion this is a significant development and one that should be considered as a warning sign for the intermediate/longer term health of the index.
Trading Support:
- 4500: Previous Resistance; 76.4% Retracement Level
- 4489: 50dma
- 4460: Previous Support
- 4427: 10dma
- 4400: Previous Support
- 4350: Recent low/support
- 4350: 100dma
- 4300: Previous Resistance
Trading Resistance:
- 4550: Previous short term support
- 4631: Mar 2022 Peak
Chart 1 (ES1 Daily Bars)
Source: Bloomberg and Scotiabank Est
