ES1 (SP500 Generic Front Month) – 9.22.23
*I have been very consistent over the past few weeks in saying that a break below 4500 support would create a more significant move down. I highlighted downside targets of 4460, the 100dma (ref 4456) and 4400. On Sep 19 the index hit the 4460 target with a low of 4462 (A). On Sep 20 the index hit the 100dma (ref 4456) target with a low of 4443 (B). On Sep 21 the index hit and overshot the 4400 target with a low of 4366 (C). I am very happy with the way the index hit my downside targets in such a clean and pretty manner. The index has now fallen over 4% in just 5 sessions. Momentum (M1, M2) has degraded further and remains negative. Volume has spiked as prices moved lower. All said I remain negative here and see potential for a test of 4300. As far as trade support my focus near term is yesterday’s low at 4366. If buyers are going to step in and defend the index that level needs to hold.
Trading Support:
- 4300: Previous Support/Resistance
- 4296: 200dma
Trading Resistance:
- 4400: Previous Support
- 4456: 100dma
- 4460: Previous Support
- 4481: 10dma
- 4500: Previous Resistance; 76.4% Retracement Level
- 4540: 50dma
- 4586: Previous Resistance
- 4684: Previous Resistance
Chart 1 (ES1 Daily Bars)
Source: Bloomberg and Scotiabank Est
