Patience

Market has been consolidating for the past two weeks. I have been calling for a small correction and I continue to believe that one is coming. Shorts need to remain patient. Nothing has really changed. There have been plenty of opportunities for shorts, they just haven't proven favorable for swing positions yet. In my previous post I called attention to the 1512 price level on the ES (H March Contract) and suggested that shorts should consider exiting positions on a confirmed move above 1512. So far you can see that this level has been holding up quite well with the ES touching the 1511 level twice in the past week before selling back down on each occasion.

 I continue to like the potential for at least a small correctional move to the downside. Markets have been testing resistance now for 5 straight days, so shorts do need to be aware there is an increasing chance for another new high. This suggests my 1512 warning level could be breached. Traders who are in position to take a little heat should continue to hold shorts here, if not, it may be a better idea to wait for a failed breakout above the current highs and then enter the market short from there. 

1490-1491 is the key support level right now. When this level breaks, expect the low 1470s next. But even still, this remains a bullish market. Any selling will likely be short lived. I'll be looking for support to confirm around 1470 (with the potential for a pierce even lower into the 1460s). I will be looking for long entries from there.

Levels to watch on the ES (H, March 2013 Contract):

Resistance above at 1511-1512, 1519-1520

Support below at: 1491-1492, 1486-1487, 1479-1480, 1470-1471