Markets strong to open up today's session.
1) Initial Jobless claims reported at 368,000 versus consensus estimates of 395,000. Continuing claims also fell to 3.77 million from 3.83 million.
2) Oil is lower following news that Hugo Chavez has proposed a plan that would resolve the conflict between Libya's Gaddafi and the anti-government forces. The plan, involving a commission from Latin America, Europe and the Middle East is questionable, but the sell-off in crude cannot be argued.
Even with the bullish sentiment, my bias is neutral at the moment. The upward price action doesn't seem much more than noise to me. If buying continues after the opening bell, I don't think the ES will trade higher than 1326-1327 today. But more importantly, in terms of recent market weakness, I will be watching to see if the overnight momentum is rejected in the early going. I want to see if market participants view this move up as a selling opportunity. A gap fill will provide confidence that the market remains weak.
Levels to watch on the ES today:
Resistance above at 1321-1322, 1326-1327
Support below at 1313-1314, 1307-1308, 1302-1303
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There is some interesting price movement happening for pre-market action. We already saw a mini-sell-off of 4 points (in the blink of an eye) off the highs and there is some volatility coming into play now before the opening bell. Feels negative to me...
ReplyDeleteConsidering short, but no shorts until resistance has been confirmed...
ReplyDeleteBy confirmed resistance, I mean we need to test the high a couple more times and fail or we need to see a capitulation move to a new high that is followed by an immediate rejection...
ReplyDeleteHi verde,
ReplyDeleteyou mean resistance at 1326-27.
In ialian "verde" means "green".
Here in europe the dax is already from +1.5% to 0.60 and the eurostoxx50 also from 1.5% to now 0.2%
Riccardo
Do you also think the top is in ?
ReplyDeleteRiccardo
No sign of a top yet... watching the action to see...
ReplyDeleteMorning Verde - Shorts are going to be hard to get today. The market is just too strong. Bulls do not want to let go and trying to determine resistence levels are futile right now. I'm trading the long side today...
ReplyDeleteVis
can't argue that Vis, I still like the 1326-1327 resistance, but, I'm not confident for a short yet. And Riccardo, be interesting to see if the S&P follows the STOXX 50 action
ReplyDeleteIt looks like ES will break up higher here. The key is to see if that move is rejected. If that happens, I like the short
ReplyDeleteNot sure how much higher we go today but the key is that we won't go much lower. Decent vol at 1.4 mil at the moment which keeps a solid bid underneath. We may back off here a little but it could be a high of day close. Just keep scalping the small pullbacks for a point or two...
ReplyDeleteVis
Oil, Gold and Silver all seeing small bounce off support levels. If that support holds and they see a bid, we could see the inverse move for equities... Still, no sign to take short entry yet on the ES... But looking forward, I think there is a high probability for a move back down to the low 1300s on ES... I'll wait for a top to confirm before I rush to get short
ReplyDeleteShort 10 cons 1330.25...
ReplyDeleteVis
Covered 10 cons 1329.25...
ReplyDeleteVis
I had made numerous long trades earlier today, but price hit top-line resistance which made that one a lower risk short trade, entering heavier than normal...
ReplyDeleteVis
Still believe we may close HOD or close to it... Just watching now...
ReplyDeleteVis
If I had to pick a level to short the ES, I like 1332. However, price action will dictate whether or not I enter there. It will certainly be good enough for a scalp, but no telling yet if it will be good enough for more.
ReplyDeleteIf ES closes the day at the highs, I will probably stay up and trade the GLOBEX session and look for an opportunity to get short overnight...
Good short trade Vis, I took the exact same trade... but not 10 contracts, thats too rich for my blood :)
ReplyDeleteBy the way, correction to my previous post about the 1332 short entry. I said that it "will" be good enough for a scalp, but I meant to say, "should" be good enough for a scalp... there are certainly no certainties in this business...
ReplyDeleteThanks Verde - I don't normally enter that heavy but price hit a short term tipping point and just saw it as a low risk trade. You have to take those trades when you see them. It builds confidence and creates mental stability for the next round of trading.
ReplyDeleteMarket strong today but tomorrow may be another story. I see March being in a fairly tight range(30-70 pt) with continuous up and down price action.
Vis
Looking ahead to tomorrow, I think futures need to sell off over night for a gap down if we want to see any negative action on Friday. If we open tomorrow around the highs, I think we will have a narrow range consolidation day, which won't be great for the shorts as it will form a bull flag like pattern.
ReplyDeleteBut, its Friday and typically we have seen low volume on Fridays and if it is a low volume day, we likely won't see any big selling... If I had my way, markets would sell off tonight... we'll see...