Watch for Short Covering into the Close

Since we made new lows this afternoon on heavy selling, we then went on to make two new one-tick lows. This usually happens in an effort to shake out the weak longs. If we don't go on to make new lows below 1157, watch out for a short covering rally into the close. When I say watch out for it, I mean look to take advantage of it by getting a good entry long.

Lows for the Day In?

We touched down to a low of 1162.75. ES has already achieved an average daily range, there is a potential intra-day bottoming pattern forming and at the same time the ES has bounced off a key resistance level. This suggests a high probability that a bottom is in for the day. I like buying the down-tick now with expectations of a move back up to 1170 on the ES. If we make new lows, do not defend the position.

Market Sells Overnight and Into the Morning

The selling kicked off yesterday with disappointing earnings from Apple. Apple beat expectations, but sales of the iPad disappointed. Support should be coming into the market now in the low 1160s. I will be looking to buy somewhere around 1162-1163 on the ES. If we confirm a move below 1160, I expect that selling will continue down to the low 1150s