Distribution Before a Fall

Today's action is great, we are seeing some of the finest chop in a long time. In my opinion this is distribution, the bigger funds are slowly getting rid of their positions. I think the decline, if we get it, will be short lived though. I like the mid 1320s as a good target to the downside. If selling is intense enough, we could see a move down to below 1310. I will consider swing longs below 1310 if the ES manages to sell that low. Its still early, we'll see how she goes...

A close above 1360 today on the ES, however, will make me think twice about getting excited for the short-side.

Some Selling Pressure

There seem to be more and more signs for concern in the markets.

Tensions in Iran continue to mount which is driving oil prices higher. Higher oil prices are never a good thing for the global economy.

Manufacturing PMI for China came in at 49.7. This is up slightly from January but remains the fourth straight month under 50 showing continued signs of contraction.

Manufacturing PMI for Eurozone and Germany came in lower than expectations.

Although markets are still near their highs, there is minor selling pressure of late and the market is due for at least a small correction.

Existing Home Sales in US due out at 10:00am EST

Levels to watch today on the ES:
Resistance above at: 1364.50-1365.50, 1367.50-1368.50
Support below at: 1354-1355, 1348-1349, 1344-1345