Looking Like We Will Fill the Gap from 7/12

I was hoping that we would not fill the gap yet. If we kept marching up to say 1102 or even all the way up to 1130, I would feel much more confident when taking shorts at those locations. This would give much better odds at a larger move down. i.e. from 1130 to gap fill at 1075 on the ES, that would be 55 points.

With the sell-off this afternoon, I wouldn't be surprised to see gap fill at 1075 in the overnight session or tomorrow. I am hoping the market can rebound from here and continue up on more positive earnings news. At that point it can sell-off.

However, the market may just be trying to shake out weak longs here. At that point we will see the market rally higher. Its all fine. Either way, the market should be setting up to sell off. I'll let you know when I jump on it. Hopefully I don't miss it...

Market Outlook

Market definitely Bullish of late. I had said previously that I expect the lows to be retested before we see a genuine market rally. By genuine market rally I mean moving beyond the January highs and possibly retesting the April highs. I do not think this can happen without first coming back to test the 1000 level on the ES. That being said, I am not going to sell this market just yet. I won't be looking to to take any potential swing shorts until we trade up beyond 1110. I will be looking at opportunities to get into a swing short between 1110 and 1132. Somewhere in this range will mark the highs before the next significant move down.

Other key levels on the ES, above where we are currently trading, are 1102 and 1143. I will be looking at short opportunities at these levels as well.