Friday saw the highest close on the S&P 500 Cash Index since 6/25/2008. This morning the markets appear to be following through on the bullish sentiment as each of the indexes are set to gap up. European markets also higher with the German DAX at new 3 year high.
So the tone this morning is definitely bullish ahead of the open. The key is to see if buying is sustained after the opening bell. Market is attempting to shrug off any notion that it is setting up for a reversal. I can't ignore price action and if this gap-up is followed by continued buying, I will have to remove my short bias (at least for the moment). We'll see how this morning trades and where the market closes before jumping to any conclusions, but at the moment, you can't ignore the strength.
To help the bears cause, the market will have to reject the new highs and trade back down below 1306 and back into the 1290s this morning...
Levels to watch today on the ES:
Resistance above at: 1313-1314, 1317-1318, 1321-1322
Support below at: 1305-1306, 1301, 1295-1296, 1288-1290, 1283-1284
Monday, February 7, 2011
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