The market did pull back as expected and the ES saw a move down and through my first level of support yesterday. Again positive remarks from Boehner and Obama regarding the fiscal cliff were enough to put a bid back into the market. Buying pressure was intense for the second time in a little over a week signaling that this latest bullish move is likely here to stay.
Markets are gapping up this morning with the ES trading up into resistance approaching 1418. I had said I would love shorts in this area in my previous post, but since the market has already pulled back, this is no longer the case. I do like shorts up here, but only as day trades now. I will look for a pullback to at least 1409-1410 and potentially as low as 1400 or at least to Gap Fill at 1406-1407. Need to see how the market closes today to know more. Expect support to hold on any pullbacks. If buyers step in and drive price back up or if price can remain elevated into the close, this will signal confirmation for bullish momentum and I will like buying dips going forward. This is what I expect to happen.
Levels to watch today on the ES (Z December Contract):
Resistance above at: 1416-1418, 1423-1425
Support below at: 1408.50-1409.50, 1403-1404, 1399-1400
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