Yesterday was a boring consolidation day, which I had expected, but there were some signs of weakness as the ES made lower highs throughout the day. Last night the ES broke down through support at 1287-1288. So it looks like we could see some further down side today.
Japan's Nikkei fell 1.7% overnight. There seems to be rekindled concerns regarding the restoration of damaged nuclear facilities. Estimates from the country peg the cost of damage from the earthquakes and tsunami at 25 trillion yen.
I am biased to the downside today, though I don't expect a big push lower yet. If we do trade down today, I would expect support to hold in the mid 1270s and would be a buyer there in the short-term. We may see another minor push up before getting the continued down-side momentum that I expect. As usual, will watch for any breaking news that could add volatility back into the market and put further pressure to the downside.
Levels to watch today on the ES:
Resistance above at: 1293-1294
Support Below at: 1281-1282, 1275-1276
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