Weakness Continues With Disappointing Initial Jobless Claims Number

Market remains under pressure. Initial claims came in at 359,000, which is trending down, but was higher than revised expectations of 350,000. Market has maintained weakness as a reaction and remains under pressure.

ES will likely trade down to 1377-1381. ES should find support there and that price area will be a good long candidate. We'll have to see how much buying can come in at that point, but I expect that the market will rally from there. As was the case yesterday, it is best to wait for confirmation of support before taking a long entry. There is definitely a change in market behavior of late as buying the dips is no longer as easy as we have been accustomed. There is much more contention between buyers and sellers at support levels now.

My expectation is that the official downturn has not yet begun, though the recent move to the high of 1419.75 is a potential topping pattern. The uptrend is still intact however, and until this is not the case, I remain biased to buying the dips.

Currently looking at key support at 1377-1381 ES

If that support does not hold, the next level to watch is 1369-1370 ES. I would be a confident buyer there.

Market Remains Slightly Weak Following Monday's Rally

I think there is a little more downside left here before I like long entries. If the ES can trade down to the 1396-1397 price point I will look to buy into the market, that's the best trade I see for today... If the lower 1400s (ES) hold in the first hour of trading, I will consider getting long sooner.

Levels to watch today on the ES:
Resistance above at: 1410-1411, 1415-1416
Support below at: 1401-1402, 1396-1397

Back Above 1400 on the ES

After feigning weakness with three straight days of declines last week, buyers stepped in at the end of the week. The ES rallied 14 points off the low on Friday. That rally continued last night and got an added boost when Ben Bernanke mentioned (in comments this morning) that the Fed must consider more accommodation to aid the recovery. The ES quickly rallied an additional 5 points. Gold, which has struggled a bit lately, surged more than 1.2% immediately following the comments.

Levels to watch today on the ES:
Resistance above at: 1403.75-1404.75, 1408-1409
Support below at: 1399-1400, 1396.50-1397.50

Weakness To Begin The Day Presents Another Buying Opportunity

We begin today's trading with weakness again as the ES has sold down 10 points overnight following losses in Europe and Asia. Weakness may be in response to BHP Billiton suggesting iron ore demand in China is slowing.

We are seeing solid support hold up so far just above the highs from 3/14 and 3/15. Most of this year my bias has been bullish and this means I have favored buying the dips (as I frequently say). This morning is one of those opportunities. If you were, or are able to get a buy entry in the 1395-1395.50 range, it allows you a low risk opportunity to the long side. There is a decent reversal pattern off the low of 1394.25 which allows you to use a small stop at or just below the low making your risk to reward very favorable. If you get stopped out, you can always get long again if support holds and another reversal pattern emerges.

I'm Long ES at 1395.50. First target 1402. Will consider exit if ES trades below 1395, can always get back in long when support confirms.

Levels to watch today on the ES:
Resistance above at: 1401-1402, 1408-1409
Support below at 1393-1394, 1387-1388, 1384-1385

Quick Thoughts This Monday Morning

Markets showing a little bit of weakness this morning following last week's move higher. Not much to say here other than to maintain my preference of buying the dips. We have been experiencing relentless bullish action over the past three months. As long as the price action continues to confirm it, I'll continue to expect it.

Looking a little further ahead however, I will be watching the 1440-1450 range. If the ES trades there in the next week or two, I like shorts and will expect a pullback to at least 1400 from there.

Levels to watch today on the ES:
Resistance above at: 1400.25-1401.25, 1403.25-1404.25
Support below at: 1394-1395, 1388-1389

The market saw an initial sell reaction overnight to news that Greece's recent debt swap drew participation from more than 80% of its private sector holders. This was more or less in-line with market expectations and the market quickly shrugged off the news as it was pretty much priced in following the best two back to back trading days in more than three months. This of course followed the worst sell-off in more than three months. It seems that buyers continue to be willing to step in and buy the dips.

US trade data showed a deficit of $52.6 billion for January, this is greater than the $48.4 billion that was expected.

Price jumped higher in pre-market trading after non-farm payrolls and non-farm private payrolls surprised to the upside. That buying was quickly rejected signalling a possible top for the day. Its really too early to tell. With a pivot high at 1367 ES (June Contract ESM12) and then a lower high at 1365.25 ES, the 1365 level will need to hold as resistance this morning to expect any continued selling today.

Levels to watch today on the ES (June Contract ESM12):
Resistance above at: 1365, 1367, 1373-1374
Support below at 1359-1361, 1353-1355

Market Sees at Least a Temporary Bid Following Yesterday's Decline

Stocks suffered their worth loss in over thee months yesterday. What I thought was strong support at 1345 on the ES got taken out by more than 6 points, but this morning the market is trading back up close to 1350. It has been said that concerns over the Greek PSI deal were the catalyst for the selling yesterday. Now following news that the Greek PSI Deal will get done, the market has found some bids and has traded 10 points off yesterday's lows. Greece continues to be old news, but nonetheless, continues to act as a trigger for selling in what is an overbought market. The question now is if the latest decline has any more legs. I think it does, and I see 1331-1332 as a potential next target lower. So the next question is how much of a bounce might we see before the market does continue lower? We are seeing some selling off the 1349 pivot resistance as the market opens. I'd prefer to sell into resistance levels or buy into support than to try and predict which way the market will move from here.

Levels to watch today on the ES:
Resistance above at: 1349-1350, 1354-1355, 1358-1360
Support below at: 1342-1343, 1335-1336, 1331-1332

Selling Pressure Picks Up Overnight

US Futures lower this morning as we are seeing continued bearish sentiment in Asian and European markets overnight. Selling pressure has been steady, price has not rallied off of support all evening. This is different from the norm of late as usually we see buyers step in fairly quickly to rally price higher off key support levels. The ES has been consolidating in the 1352-1354 range throughout the early morning hours.

I do believe we should see a bounce higher this morning off the 1350-1352 support, though a pierce lower is always possible. I am looking for a move back up to 1358-1360 on the ES. It will be interesting to see if buyers will have enough conviction to push the market higher than that, but it will certainly be an area to consider a short entry for a move back down to the lower 1350s.

So even amidst the current weakness, I like longs in the 1350-1352 area on the ES and like longs even more around 1345. Selling pressure or continued consolidation may persist for a little while after the opening bell, but eventually I expect buyers to move price higher. I will consider taking profits on any successful long entries in the 1358-1362 range. This is my tentative outlook heading into this morning.

ADDITIONAL NOTE, 9:28am EST
Wait for support to confirm before taking long entries. 1250-1252 did not hold. Very heavy selling pressure coming in. Must proceed with caution. I will try and post additional notes in the comments.

Levels to watch today on the ES:
Resistance above at: 1360-1361, 1365-1366, 1369-1371
Support below at: 1350-1352, 1344-1346

Although Buying Enthusiasm is Waning, Charts Remain Bullish

Markets didn't do much in the final couple of days of trading last week. Bernanke's non-mention of QE3 at his FOMC semiannual report to the House Financial Services Committee on Wednesday, likely prevented any follow-through of buying enthusiasm. It certainly provided an excuse to sell the Gold and Silver markets as they got crushed Wednesday. That selling of the precious metals seemed excessive given the fact that the overall commodities sector held up much better as did the broader markets.

In any case, charts remain bullish. Until that changes, I continue to prefer buying the dips. At the same time I like selling rallies to new highs. Point is, I'm not interested in holding long positions in an overbought market that could begin a correction at any time. If I had to hold a swing position, I would likely prefer to hold it short right now as I do expect a 40-50 point move down before seeing a 40-50 point move up from the current highs on the S&P 500.

This morning we are seeing some weakness in global markets.

China cut its economic growth target to 7.5% annually from 8.0%, the lowest target since 2004 sending Asian stocks down. Eurozone PMI data was lower than expected and European stocks are trading down as well.

The ES showed reactionary selling overnight declining to 1361.50, but has climbed back up 5 points in the early morning.

Levels to watch today on the ES:
Resistance above at: 1370-1371, 1373-1375, 1381-1382
Support below at: 1361-1362, 1358-1359, 1350-1352