Last week, ES experienced a deep late-day flush from the 4467-73 target area, landing at the 4420 level. Despite a 30-point rally, ES has largely remained stationary since late June. This period of range trading, between 4420-4490, is likely to continue for some time, providing a level-to-level day trader environment.
The Markets Overnight
🌏 Asia: Up strongly 🌍 Europe: Up 🌎 US Index Futures: Up 🛢 Crude Oil: Up 💵 Dollar: Down slightly 🧐 Yields: Down 🔮 Crypto: Down slightly
World Headline
The Nasdaq 100 index will be rebalanced to reduce the dominance of the largest mega-cap stocks within it. The new weighting will be announced on July 14, taking effect for pre-market trading on July 24.
Sweden will likely be admitted to NATO today at their annual summit.
Asian equities higher as China announces loan relief for it’s troubled real estate sector.
Key Structures
The price action since Friday has been volatile, with a squeeze from 4430 to 4470s late Friday afternoon, followed by a rapid sell-off down to 4011, and then a rally back to 4440s. The big picture structures and levels to watch for now are 4485-95, 4460, 4420, 4382, and the large rising uptrend channel in white.
The bull case would involve continued base building in the 4420-40 range, then a breakout targeting 4461. The bear case would begin with the fail of 4418, followed by a period of acceptance and then a short after perhaps 4415.
Wrap Up
In summary, ES is currently in a basing period. As long as 4418 holds, we can expect continued basing in the 4420-40 range and then a breakout to 4461. However, a fail of 4418 would signal a bearish turn.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.