By analyzing potential moves in the US indices on Sunday afternoon, prior to the Asian opening, you can focus on potential support and resistance areas before the market action starts.
In this video, Gail Mercer, reviews the following markets:
- E-mini Nasdaq
- E-mini Dow
- E-mini S&P 500
Although the E-mini Nasdaq weekly and daily charts are showing established uptrends, the stochastics is overbought on the weekly with a three-bar reversal to the downside forming. The daily stochastics is not confirming a retracement, at this point, because it is turning upwards.
Using the shorter-term view, the 180-minute chart is indicating a potential turn on the stochastics to the downside and the 45-minute chart is indicating the reverse (a potential upward turn).
Sounds confusing, right? Actually, it’s not. The charts are simply showing you that you should wait and see what unfolds on Monday before jumping in too quickly.
The e-mini Dow weekly and daily charts are both showing established uptrends. The stochastics is overextended on both timeframes and the daily is turning down. This indicates a short-term retracement.
Using the shorter-term view, the 180-minute chart is continuing to move up, even though the stochastics is moving down. And, the 45-minute chart is showing the stochastics is near the 80-overbought line but turning down. The key will be if the 45-minute tests the support at 21963 and it holds.
E-mini S&P 500
The e-mini S&P 500 weekly chart has a three-bar reversal pattern with the stochastics overbought. However, the daily chart is showing another upward move is expected. If the upward move completes on the daily, you should check for divergence (higher highs in price and lower highs on the stochastics).
A shorter-term view shows the 180-minute is likely to go down and test the prior support level at 2466. The 45-minute is also indicating a downward move with support at 2469.5. Therefore, the levels to watch overnight into Monday will be what price does at between 2466 and 2469.50.