Today's Bottom Touches 1279... Now What on the ES?

We didn't quite reach my 1276 target long entry today, too bad, would have been a very low risk trade. What I'm speculating now moving forward is that ES will move up and test the 1299-1300 resistance (maybe tomorrow). I will look to get short there, but won't defend that position as there is a good possibility ES will continue higher to 1304-1305. If that target is reached, I will again look to get short.

That is the key level I am looking at right now. If ES confirms a move above 1304, I will have to switch to a neutral (which could change quickly to a long) overall bias and will consider that the correction may (I repeat "may") be officially over...

That's what I am looking at as of this moment here on Wednesday afternoon. We'll see...

Follow-up on New Oil Spill in the Gulf

I mentioned on Monday's Post that there was a possible second oil spill in the Gulf. Well, the source of the oil spill has been confirmed and no it was not silt from the Mississippi River, it was oil.

"Houston-based oil company Anglo-Suisse Offshore Partners, LLC accepted responsibility for at least part of the reported oil impact.
The company was plugging an abandoned well between last Friday and Tuesday of this week"

They have been plugging the well since last Friday?? I like the fact that it has only just been confirmed in the news today! In reality, I haven't even seen it mentioned in any of the major news media outlets...

News is sparse, but it is something to keep an eye on. If it develops into a bigger story it could have an impact on the markets.

Markets Show Some Weakness

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