The S&P 500 e-mini futures contract (ES) has either ended sub-wave 4 around 1206 area or made a major wave 2 top around 1206.
The price hasn’t given final confirmation which top the 1206 level belongs to, but regardless of that the short-term direction still points to the downside. The price is likely to move down to retest 1077 area, but may not do it today.
Based on daily momentum indicators, the 20/40 EMA lines are chasing the price down, which indicates that downside strength remains strong. Second, the short-term overbought condition was smoothed out by the intraday price bounce and has now started to fall back into neutral territory.
Today ES could have two actions:
- It could try to hold up 1100 psychological support level to continue forming A-B-C correction in sub-wave 4; or
- it could make a continuation low to breakdown 1100 line and push price lower to 1077-81 range to retest the Aug. 9 Globex low area.
In our chat room we will be watching for early indicators to determine which possibility to trade.
To see Nat’s full analysis of the e-mini futures, visit http://naturus.com and open the weekly preview from the home page.
ESU1 Daily chart
