Summer Trading = Dull. Still, Opportunities Exist

Last week was even less exciting than I expected with the ES trading in less than a 17 point range, less than my already conservative 20 point expectation. Nothing has really changed, I expect limited action and limited trading volume to continue this week although the range should expand a bit. I continue to look for opportunities to sell this market. Last week the 1400 level provided many opportunities for short plays. This week should provide more of the same. We are already seeing another slightly higher high (1404 ES) sell off this morning. In the current market climate, when I say sell the market I am talking day trades and taking profits when you get them, whether that's 5 points, 7 points or 10 points.

Although there are great opportunities for shorts, in the current action, you have to favor the upside with the realization that the upside is limited. I fully expect 1409-1412 ES (on the U-September Contract) to be tested early. I will look for shorts at this level, like I was looking for shorts at or above 1400 last week. When selling does finally take hold, I expect the ES to trade down to 1375 and possibly as low as 1365. That's a potential 35+ point swing and that's the trade of the week. We'll have to wait and see though as there is no sign of sellers entering the market yet. 1409-1412 needs to be hit before I will consider holding any short entries for a significant gain. If that view changes I will post comments about it.

Lets not forget there are plenty of buying opportunities as well, without a move up to about 1410 first, I will like buying the dips.

Levels to watch today on the ES:
Resistance above at: 1405-1406, 1408-1409, 1411-1412
Support below at: 1395-1396, 1391-1392, 1387-1388