Introduction
ES has staged a sharp bounce from the 6,300–6,400 selloff low, pushing back up toward the 6,800–6,900 resistance zone. This is happening across all equity markets because of the ceasefire in the Middle East. Some reports though are showing that the deal Donald Trump made with Iran is not playing out exactly as he wanted.
We will look at the technicals but this market is being driven purely by the middle east conflict.
The S&P 500 started selling off around March and continued as the conflict got worse in Iran, primarily the closure of the Strait of Hormuz. Oil prices spiked, the Dollar got stronger, and so equity markets felt the pain.
Now, after Trump’s deal with Iran, the price is back above both the 50 and the 200-day moving average and only 3.5% away from all time highs. This is an incredibly strong reversal and shows us just how much the middle east conflict is affecting it.
Key Levels That Matter
The most important zone in play is 6,850–6,900.
If price can break above and hold, the path opens toward:
- 7,000
- 7,200 (R2)
But if price fails here, attention shifts lower:
- 6,600–6,620 (recent support / pivot)
- 6,300–6,400 (major support)
That lower region is critical. A break back into it would mean the market is not digesting the deal well and the bears are starting to take control again.
Scenarios and Probabilities
| Scenario | Description | Estimated Probability |
|---|---|---|
| Lower High | Rejection at 6,850–6,900 → move back toward 6,600 or lower | 45% |
| Range | Chop between 6,400–6,900 | 35% |
| Breakout | Clean break above 6,900 → move toward 7,000+ | 20% |
Possible Trades
Short setups become more attractive if price fails to hold above 6,850–6,900, especially if the bulls can’t push price above this level. For now any long setups are difficult to say because of the 8% rally we have already see.
The market is still dancing around and is very volatile. Traders are trying to position themselves according to the geopolitical environment so technicals have a lesser bearing on price action.
This analysis is for educational and informational purposes only and does not constitute trading advice. Futures and forex trading involve significant risk and may not be suitable for all investors. Always conduct your own research before making trading decisions.
