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S&P500 (ES) Testing Weekly Chart Upchannel Support

The S&P500 (ES) is trying to bounce going into today’s European morning after yesterday’s 1% plus slide, with some short covering likely ahead of Friday’s highly anticipated US Non-Farm Payrolls (NFP). Significantly, ES is testing upchannel support (on the weekly chart), with odds high for a weekly close below this major uptrend support line in October. Although a rebound in the next few days off descending wedge support (on the 4hr and daily chart) is probable, any break above wedge resistance (on the 4hr chart) will likely be capped at last Thursday’s high. Watch for volatility as soon as today following the US’ ISM Services PMI at 10am EST, and after Wednesday’s US ADP Non-Farm Employment data. Any decisive break below the weekly chart upchannel support will likely wait until the release of NFP. The weekly RSI, Stochastics and MACD are sliding, weighing on the tentatively bottomish daily RSI and Stochastics. I am looking to go short in the red zone (of the daily chart), targeting the green zone for Monday. The amber/yellow zone is where I might place a stop if I was a swing trader (although in my personal account with which I seldom hold overnight I sometimes set my stops tighter).

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