The recent market movement has been confusing for many traders — understandably, given the chop chop chop inside the narrow range of the last few days. But this range-bound market may end soon.
The ES is is overbought in the short term, but almost every night there is a pullback in overnight trading that releases the overbought pressure. In the past two days dip buyers have kept showing up in the support area.
Today (Thursday) is rollover day and yesterday’s close was the end of the classic monthly and weekly bullish period. ES has already had 4 narrow range days. It is congested around a small top range. At this point It should either move up decisively, or move down decisively — and it should do it soon.
After 11am we begin trading the new contract ESZ0, and the price movement then will indicate if the ES will move up and breakout through the 1104.50 resistance line and go higher, or fall back to the support area or lower.
Trading strategy for Thursday
ESU0 Daily chart – 60 minute bars
On the 60min chart, ES formed a triangle pattern. A move above 1104.50 will be bullish, and can push price up further to 1109.25 or higher to 1118.00 – 21.75 (short entry).
A gap down below 1086.25 will be bearish. It could cause price dip further to 1080-1075 or lower.
If there is no breakout move during overnight trading, the rollover range on the new contract ESZ0 is 1098.00 to 1081.00. The price could stay inside this range for one more day.
Trade with caution on Rollover Day. New traders may stand aside today..
