8/2: Daily Recap, Outlook, and Trading Plan

Recap

After the ES rallied and trended cleanly for +390 points from June to mid-July, the last two weeks have been characterized by a grinding summer chop. Despite testing the 4609 level six times in the last week with two failed breakouts, the ES has remained stubbornly resistant.

Markets Overnight

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

World Headlines

United States government debt loses it’s AAA rating as Fitch downgrades US Treasuries from AAA- to AA+

Key Structures

The core pattern containing the entire consolidation since the July 19th high is now a broadening formation. This structure, called a “right angled, ascending broadening formation”, has support roughly at 4560 and resistance roughly at 4660.

Support Levels

The major support levels are at 4599, 4592-89, 4570-73, 4562, 4548-50, 4493-88, 4445-50, 4410-15 and 4403.

Resistance Levels

Resistance levels are at 4608, 4614, 4618, 4623-26, 4648-4652, 4661, 4682-88, 4706-08, 4717, 4726, 4736, 4750 and 4760-65.

Trading Plan

Given the current unpredictable chop, trading will be done very seldomly. If we do get some upside today, 4623-26 is considered strong and likely has one final sell off before any breakout. The bear case would begin on the fail of 4592-89.

Wrap Up

We remain in a period of low predictability chop and the focus will be on executing the above trade plan. If 4589 fails, it's short to 4570-73, bounce, then probably lower down to 4550.

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