Market Analysis for Jun 18th, 2021


E-mini S&P 500 Futures: Keep It Simple Stupid – Weak Seasonality, See If Bears Can Sustain Part 2

Copying and pasting a section from our ES trade alert room’s premarket gameplan report. FYI, the ES trade room provides real-time entries and exits with pre-determined stoploss and target levels alongside with real-time lessons on strategy/risk management/psychology/momentum. We specialize in quick intraday alpha setups and short-term swings with duration of 2-5 days and occasional 10-15 sessions holding period (some key levels + strategies have been redacted for fairness to subscribers)

  • Yesterday closed at 4215.5 and it was a weak close because price action tried all day to reclaim 4225 but couldn’t. If you recall, it was the key level given Wednesday’s breakdown
  • As demonstrated in our room, we had to take profits and derisk at EOD given the risk into today’s quadwitching event (both ES and RTY failed to reclaim important resistances
  • Again, we still need to be mindful of mid June-late June weak seasonality as sentiment could change in an instance by price action confirmation/reversal (Weds June 16th is a great example)
  • As of writing, price action hovering at 4185 so it’s going to be a gap down open favouring short-term bears. Going forward, 4225 remains the must hold level for bears/sellers and 4165/4150/4140 continuation targets also act as a confluence zone (where multi-week lows converge)
  • Expect confluence zone of 4165/4150/4140 to hold on first try basis, meaning look for any applicable deadcat bounce/stabilization event in the next day or two
  • If this confluence goes without any meaningful bounce, then much lower downside risk opens
  • Overall, trying not to get complacent or lazy here as the multi-week grind up has structured everybody and their mother to aggressively BTFD vs the first support levels. We trade the levels here, but don’t marry your gameplan if things change, must be adaptable. Warned many times about hedging vs weak S&P 500 seasonality

 

Additional context from past months remain mostly unchanged (copied and pasted):

  • The shit hits the fan (SHTF) level has moved up to 3965 from 3650, a daily closing print below 3965 is needed in order to confirm a temp top setup/reversal for the daily+weekly timeframe. (the current April 2021 lows which was the breakout acceleration point of the past few weeks) 
  • A break below 3965 would be a strong indication of weakness given the multi-week trend of being above the daily 20EMA train tracks. For reference, the first week of April, the price action has accelerated on top of the daily 8EMA to indicate that the bulls are in full control and continuously making higher lows and higher highs every couple sessions bottomed 
  • Different timeframes in this report so it may be overwhelming, make sure you know which timeframes you are participating and adjust gameplan + execution accordingly
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Ricky Wen is an analyst at ElliottWaveTrader.net, where he writes a nightly market column and hosts the ES Trade Alerts premium subscription service.