S&P Trades up Toward Top of Range

We gapped up this morning and surged higher towards the top of the trading range after better than expected non-manufacturing data was released at 10:00am. We have been chopping around between 1145 and 1148, but it doesn't look like the market is ready to break down yet. 1150 is likely and 1153 would probably be the maximum price point for the day on the ES. I am looking for opportunities to short the market (probably between 1150 and 1153) and look for eventual gap fill down to the low 1130s. Current action is very bullish, so I am only considering the short above 1150. Need to see solid signs of resistance and indication of a reversal. I'll post in the comments here if I take a trade.

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...