9/21 Daily Recap, Outlook, and Trading Plan

CME_MINI:ES1!   S&P 500 E-mini Futures

Midday Friday afternoon update. The market experienced a bearish trend with high volatility last week, triggered by the breakdown of the 2-month triangle pattern and the start of the most bearish seasonal cycle of the year. Despite reaching the 4385 level, it's unclear whether a bounce is imminent. The downward trend began with a structure breakdown and will end when resistance clears or a failed breakdown occurs.

Market Gauge

🔴 Neutral to Bearish

The Markets Overnight

🌏 Asia: Down slightly
🌍 Europe: Up
🌎 US Index Futures: Up
🛢 Crude Oil: Down
💵 Dollar: Down a bit
🧐 Yields: Down a bit
🔮 Crypto: Down a bit

World News

  • US and global markets plunge on hawkish FOMC statement and dot plot, signaling higher rates for longer.
  • Bank of England and Swiss National Bank leave rates unchanged.

Key Structures

The primary pattern is the large, multi-month triangle in yellow with resistance at 4542 and support at 4473-75 (thin grey line). Key supports to watch are 4385, 4366, and 4335. The "final bottom" is only in when the original pattern that started the sell-off reclaims.

Support Levels

Major support levels are at 4366, 4355, 4330-35, 4322, 4316, 4296, 4285-90, 4268, and 4253. The next major support down is 4366 with 4355 below there.

Resistance Levels

Major resistance levels are at 4382-85, 4425-18, 4442-39, 4469, 4473-75, 4485, 4505, 4515-20, and 4542-45. The first resistance up is the 4382-85 zone.

Trading Plan

There is no bull case until a resistance clears, with the first being the 4382-85 zone. A safe bet for longs are always failed breakdowns or the reclaim of a resistance. For shorts, the safer bet is on backtests. The bear case remains strong, but there is high short squeeze risk. Shorts from here are best done on backtests rather than breakdowns.

Wrap Up

After a week of high volatility and a bearish trend, the market remains uncertain. It's important to remember that the goal is wealth building by stacking and compounding gains day after day, month after month, year after year, not catching every move. As such, trade with caution and protect your profits.

Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decision


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