Futures strong this morning with US markets set to gap up. The question to ask is whether or not the prior 3 days of selling were the beginning of the next leg down in the market, or if it is just a negative blip that will be followed by another move back up to test this year's highs. I believe it is the beginning of a move back down below 1300. To confirm this outlook, markets shouldn't see continued strength past the first hour of trading this morning. One of two resistance levels needs to hold today. The first one is the 1319-1320 level which has been tested in pre-market. If that doesn't hold, The second is a retest of the base of the prior consolidation channel at 1325-1326. I will look for short entries at these levels.
Levels to watch today on the ES:
Resistance above at 1319-1320, 1323, 1325-1326
Support below at: 1314-1315, 1311-1312, 1305-1306, 1301-1302
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