The short-term market top was established at 1299.50 on the E-mini S&P 500 futures. The official decline began Friday morning, one day later than my original prediction.
Overall bias is negative today following the largest sell-off since early August of last year. We didn't see any buyers step up on Friday, the shorts didn't cover their positions into the close and in fact, the market sold to a new low as the futures session closed. This selling comes amidst global unrest as riots hit the streets of Cairo which ignite fears that political instability and uprisings could spread throughout the Middle East putting additional pressure on global financial markets. The selling here in the U.S. also comes on the heels of a warning (on Thursday) that Moody's may need to downgrade its AAA-rating of U.S. debt sooner than expected. The International Monetary Fund also stated that America must tackle its mounting debt if it wants to maintain its credibility in global markets.
The above statements suggest further downside is likely. At the same time, a bit of a retracement rally is not at all out of the question today. We'll have to wait and see. Futures traded down to begin GLOBEX trading on Sunday but found support down in the low 1260s. Since then and into this morning, markets are showing a little strength as Futures currently trading above Friday's close.
My strategy for today and going forward is to sell the rallies. 1289-1290 would be a great level to get short if the ES trades up there. Otherwise, I will just be playing the key levels today.
Key levels to watch on the ES:
Resistance above at: 1278-1280, 1284-1285, 1289-1290
Support below at: 1271-1272, 1261-1262, 1255-1256, 1251-1252
If we happen to trade as far down as 1251-1252, I will be a confident buyer there. NOTE: Will not defend long positions.
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Short ES 1277. Stop above the high
ReplyDeleteScratch at 1277.25, look to try short again at 1279-1280. There is a lot of resistance there so you have to try it.
ReplyDeleteI mean I have to try it (the short at 1279-1280). It is appearing as if today will be a consolidation day.
ReplyDeleteI still like short entries as we hit the key levels of resistance mentioned in above post
Short at 1279.50
ReplyDeleteUnless heavy selling comes in, I am only looking for a couple points here
ReplyDeleteNext resistance zone coming into play. Again will only look for a a couple points. Will not defend short entries unless we trade up to the 1289-1290 level. At that point I am very confident with my short entries
ReplyDelete1284-1285 ES looking like a potential short now into the close...
ReplyDeleteNo excitement in the last hour of trading. Basically a consolidation type of day. Short opportunities look good anywhere from the highs of today to 1290 on the ES. I will look to short in that range in the GLOBEX session...
ReplyDelete