Market rallied with great conviction yesterday as sellers were no where to be found. I was looking to buy into yesterday's rally but never saw a trade setup that I liked as the market never pulled back. ES rallied up to Friday's highs but couldn't break through and, as has been common of late, the market sold off at the end of the day.
The ES has traded down more than 10 points now off yesterday's highs. This morning we'll have to see if support holds at 1375-1377. I'm a buyer in this range at least for a bounce. The fact that yesterday's momentum, albeit mostly on low volume, sold off so easily overnight shows me this market is still weak. That being said, I still expect a move back up to test 1400 on the ES and yesterday's rally may have been the start of that move.
Levels to watch today on the ES:
Resistance above at: 1386-1387, 1392-1393
Support below at: 1375-1377, 1370-1372, 1365-1366
Just to note: European markets are down as well this morning following what was an even bigger rally yesterday than we saw in US markets. Concerns remain in the European banking system, specifically in Spain.
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