ES continues to form a round top. But this round top takes many days to complete. The price moves we are seeing — one day strong and next day weak — is a process often seen about the end of a trend. We just need to be patient with the market.
Today is the last day of October, when funds establish their month-end results and prepare for the next month, and the end of the fiscal year for many asset managers. Repositioning activities will be seen all day long. If there is no big move in the early morning, a small range should be expected.
ESZ0 Daily chart
Trading strategy for Friday
On the 60min chart, ES did exactly what we expected: it held above 1173.50 overnight then popped up to 1186.50 area to end a correction move up.
Today 1186.50-87.50 will be the key level; it needs to hold the price down for a downside continuation move. If there is a break above 1188.25, price will pop up to 1192.25-93 (short entry) to retest Monday’s high or higher to make a new high in the 1196.50-98.50 area (short entry).
If we see a move below 1173.50, then 1167.75-66.50 will be the downside target.
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ESZ0 Intraday – 60 minute bars
