Test Highs into the Close?

We've been trading in a 5 point range for the past 4 hours. We are now testing the top of that range as we approach the range high resistance at 1172-1174 on the ES. A break above 1173 may result in continued momentum upwards, but we need to confirm above 1174 first. If we do, watch for a test back up at the 1180 highs. I will look for a short entry at the highs if that happens.

If you don't think we will break above the current range, 1172-1173, you can look to short off that level (or off a slight up-tick to 1174). Keep in mind that we are testing the high level of the range for the 4th time today. This can often result in a breakout above the range. Odds are less likely that the resistance will hold the more times it is tested.

Market Sells

We have traded down after the open this morning and have already traded an average daily range on the ES. With a potential bottoming tail forming, the lows of the day could be in. Be cautious however, as there is not yet confirmation that the selling is over.

Market Strong this Morning

Market trading back up towards the Wednesday highs with the ES touching 1180 in pre-market action. Retail Sales came in slightly higher than expected which was more good news on top of solid earnings results. CPI inflation was unchanged for the second month in a row at .1% which was below estimates of .2%. Certainly no signs of inflation yet as US debt looms. Bernanke spoke earlier this morning as well suggesting that the Fed has no plans, yet, to do more quantitative easing, meaning they have no immediate plans to print more money to inject into the economy, but he did not rule out the possibility of doing so if need be in the future. That news could put a damper on the current upward momentum.

Resistance (ES) above at 1179-1181, 1189-1091, 1197-1199.
I will consider entering into a scale-in swing short position if we trade into the 1190s

Like yesterday, support (ES) Below at 1169-1171, 1164-1166, 1158-1160

Neutral bias today as I expect choppy markets. New highs possible, but I would look to short-scalp any new highs.