ES Morning Update July 24th 2020

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The market finally pulls back yesterday but held support from a rising trendline. In the premarket today it pierced that trendline but is currently back up above it, so there's not any reason here to think it's going to breakdown today as it's most likely going to be a choppy one that just pins the options on the various indexes at max pain for this weekly expiration. However, it might open the door for another drop on Monday.

It's a tough spot to predict as you know the bulls want that 3300 level, the gap fill of 3328, and of course they want the all time high. So they might just chop around for several more days and then try again, versus allowing any deeper pullback. Losing support areas below makes it harder as once a level is lost it becomes resistance on the way back up.

Short term picture here isn't clear, so there's no point trying to forecast it. Medium term the market is still likely to make a new all time high up in the 3480-3500 area before any serious pullback is likely. The afterhours/premarket low on the ES is 3199.25 and if they revisit it anytime today they will pierce the rising trendline of support again.

I'd be careful just blindly jumping on a long as it could fail on that second hit. Plus it's an even number level (3200 basically) that every traders see's and will also go long at. When any level is that obvious I have to think SkyNet will trick people with a move through it... which might just be to shake out the longs and then it turns back up, or it continues further south.

The 3160-3180 area looks like better support for a bounce and possible long position to me. Anyway, nothing more to add here. I do not have any feel on where the market is going today, so no forecast. Have a great weekend.

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