Daily Technical Analysis

Market Report 

Market Summary

The ES1 Index (Generic 1st Month S&P 500 E-mini) lost 36bps, closing at 6856. The session was more damaging than expected. Momentum and trend indicators degraded further as the index broke the 50dma (ref 6848) on an intra-day basis, hitting a low of 6817. The index did re-take the 50dma by the end of the session but a quick snap back above 6862 is vital under the current set up. My Spot VIX and VIX Term Structure signals remain “risk on”. I wrote yesterday that, “I have continued to believe and write that there will be two main themes as we head into the end of the year; unusually high price volatility and risk skewed to the upside. I will maintain that view unless the 6862 level breaks. If we see this level break on an intra-day and closing basis, I expect the index to test 6730 in very short order.” I see this index as reluctant to break. Although the 6862 level was broken on both an intra-day and closing basis, the way it did so and the close coming within 12bps of this key level leads me to believe that the greater risk from current levels remains to the upside.📈

Support Levels

• 6920: Near-Term Resistance (Nov 28 – Dec 4) (BROKEN)
• 6862: Dec 1 Low (BROKEN)
• 6848: 50dma (TESTED)
• 6730: Previous Support/Resistance
• 6741: 100dma
• 6540: Oct 10 Low (Crucial Support)

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Resistance Levels

• 6959: Nov 12 High
• 7050: Measure Move from Consolidation

Technical Chart

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