The market has finally shown some red after what seemed like non-stop green days everyday for the past 2 months.
The peak was 2820 ES on March 3/4, around the time that US-China talks were extended. Previously, there was a March 1 deadline.
The bounce on Friday found support just below 2730 ES – which is where the most recent rally took off from. So effectively, it has retraced that rally. If this 2730 ES is to be tested once more in the near term, I would expect 2710 ES to be reached. But at the moment, we have a bounce.
How far will this bounce go? 2762 shows some signs of resistance and could last a few days. Why?
Because Friday closed significantly higher than where it opened – and where the market was at the 8:30 jobs report – indicating buyers are entering. I don’t expect sellers to bring it to 2730 ES in the immediate next day or two.
The 200 day moving average is at 2675 ES – as that number moves up towards 2690 ES in the next few weeks, I expect the market to come test that area – that is, only if 2730 ES gets tested towards end of next week or the following week.
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