Still Range Bound

We have been in range bound consolidation below the 38.2% retrace from the April highs now for almost a month. The ES Has tested the 1100 - 1002 level three times, but has reversed off it each time. This supports the idea that the market continues to be weak. Even so, if the 1102 resistance level is tested again, there is a strong chance we will break through. Watch for resistance above at $1112 to $1113 on the ES.

Though economic and political uncertainty remain with the BP Oil disaster in the gulf and debt problems in Europe, there are short term catalysts that could inspire buying in this market. The Euro looks to be seeing support while the dollar finds resistance. As well, we have seen recent strength in the European and Asian markets.

So, in the short term, I am still slightly bullish, but I expect choppy market conditions to continue throughout this week. If we do move up, I will be looking for potential short entries at the following resistance levels:
1112-113, 1118, 1136, 1142

If we move down, look for the following support levels on the ES:
1184, 1075, 1072, 1059, 1048, 1040

It is possible that we move down to 1075-1077 in the early morning, at which point I would look for an opportunity to get long.

I don't think the lows are yet in for this market, but I do expect a move higher before seeing new lows...