ES Morning Update August 20th 2020

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The market finally pulled back some yesterday into the close and is currently down a little more in the futures this morning. If we rally at they open then we should rollover again either late into the day or Friday. The upside target would of course be back up near the 3400 area again.

If we don't rally back up then the move down should continue with the 3300 area as support. The prior low on 8/11 was 3319 on the ES, and we have a possible FP on the DOW of 27,161 from the Finviz site, which is around 3314 on the SPX, and since that runs a little higher then the ES that does again point to the low 3300's as a first target for this pullback.

The overnight low was 3344.75, so that could be small support on the way down as well, but lower prices are still likely. We'll have to play this day by day but as long as the rallies back up are just bounces (meaning lower highs) and that they don't take out 3400, I'd start looking for the other two lower FP's as targets in the next few weeks. That is the old 307.05 FP on the SPY (about 3070 SPX) and more recent FP of 3014 on the SPX.

My best guess about today though would be for the open to retest the 3344 overnight low and either bounce or continue lower. I think it will bounce and rally back up to 3370's area where it will find resistance at, and from there the market will decide on the next move for Friday as closing under that zone would lean bearish and over it would lean bullish for tomorrow.

Considering that Friday is the monthly options expiration you have to be aware that they will want to pin the SPY where it makes the most options expire worthless. Whether that's up higher or lower I don't know, but looking at the open interest for I see more puts then calls right now, so that could mean a move up on Friday is more likely then down.

Time of day is important too as we all know, so if by the 11-11:30 am (EST) time period the ES hasn't broken the overnight low of 3344 then that support should hold for today and allow that rally back up to the 3370's to follow into the close today... which could lead to more upside on Friday for the max pain pin. I suspect this is the plan, which would then open the door for another move down on Monday, but one day at a time. For now lets just look for the early low and go from there. Have a blessed day.

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