I'm Back and so is Earnings Season

I'm back after a two week stint away from the markets and today (Monday) was a good day getting re-acclimated to the action. I didn't miss much in my absence as the lack of volume and volatility in the markets have provided a trading environment that has been nothing short of mundane.

Overall, bullish sentiment continues. The fact that we saw a confirmed move above 1125 on the ES supports this view. We have been consolidating in essentially a 20 point range for the past week and a couple days. The key is to determine which direction we will break out of this: above 1153 or below 1127 (ES). We tested the bottom of this range in afternoon trading today and support held.

I am expecting a move down to 1110 on the ES. The worst case scenario, in my estimates, is a retrace down to the low 1080s. If the ES trades that low, I will be a very confident buyer there as I will expect bullish action to resume.

As far as the market pulling back, its all about timing your entry to catch it. There is no sign yet that the pull-back has begun. Look for a move below 1125 as a sign that the pull-back is officially in effect. When that happens;

look for support at 1112-1115, 1102-1105, 1090-1093, 1081-1084

In the mean time, you can look to play the current range between 1127 and 1150 by selling the high and buying the low. The ES just found support at 1127, so look for a potential move to retest the top of the range in the coming days.

Earnings season kicked off Monday afternoon, so look for anything short of great earnings as an opportunity to pull this market a bit lower...