Lookout For A Reset Lower

It was a choppy week last week with price moving higher ending slightly above 4200 on the Emini S&P 500 (ES).

We exited all our swing longs on Friday with some pretty decent profits. We are in a short trade currently from 4210 area but it remains to be seen how this will play out.

Options data is on the bullish side on review today. Internals are mildly bullish. Price action is short term bullish, medium term neutral and long term bullish.

In this whole move off the recent lows, we have been in a choppy uptrend without a whole lot of internal strength. This makes me think we have more business on the downside first before we can begin a sustained trend higher. After booking our longs on Friday, we are now on the lookout for a reset lower that could possibly turn into something more on the downside… 4100/4060 area is strong intermediate-term support and on the upside 4230-70 area is strong resistance.

With our new class based trading system, we do not need to really worry about how long the trade will run. Instead we will stay with the short trade until we get an opposing signal to go back in long.

Grey zone resistance at 4223-39 and then in the 4250s. Support is at 4186-74, 4146-34,  4119-4107 and then 4080-67.

For Tuesday, daily pivot is at 4207.  Resistance R1 is at 4213.5 and R2 at 4224. Support S1 is at 4197 and S2 at 4191.

All the best to your trading week ahead.

Princely Mathew hosts The Smart Money premium service at ElliottWaveTrader.