Wednesday's Market Minute: Examining The /ES As 2022 Draws To A Close

The next couple of days are likely to be relatively light for traders as the holiday-shortened week closes out a volatile trading year. Volume is likely to be low, but one can still always be on the lookout for opportunities in the market. The S&P 500 futures contract is down about -20% from its yearly highs, and the long downward trendline going across the highs from April, August, and November is still intact. The /ES also is now trading below all three of its major exponential moving averages, which are the 21-, 63-, and 252-day lines. This is further evidence that the overall trend is down, as is the Relative Strength Index (RSI, which measures momentum) which is tilted toward the bearish side.

However, there’s a potentially important upside resistance point to watch near 3,915, which represents the confluence of the 21-EMA and the 63-EMA. Also, keep an eye on the yearly Volume Profile Point of Control (the price level of heaviest trading in the given time period) about 100 points above that near 4,015, as this is another potentially key resistance point to watch. The 3,800 mark to the downside is also likely to be a battleground price level between bulls and bears as it represents a frequent congestion point for price.

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