As noted in the proir post over the weekend we were looking at the 875 area as a crucial level in the ES. This is a widely known level that everyone is talking about as it is the support level. Today we gapped lower at the open to the 878 area and that was the low of the day as buyers stepped in and took the ES up 33.oo points from the initial morning low.
Looking at the 60 minute chart we broke through the trendline lows on 5/12 then re-tested the highs and the trendline lows on 5/19 around the 923.00 area. We are still below that low closing today at 908.75. The short term resistance is 915.00 that we could not manage to close above today. Although todays rally was impresive we are still pausing on initiating long positions at this level.
There is a possiblitiy of breaking the 1/6/09 high at 943.00 and hit the 950 before having a major sell off, but seeing that we are in the upper range of this move swing trades long might get traders caught in the market right at the potential highs of this move.
If feels like the longs are squeezing the shorts here and it might take a little more of a move to the upside for the shorts to cover, but that is usually a great place to start looking for shorts especially if we get panic buying near the top. If we get huge volume breaking the 943.00 high we would look for a reversal in the near future off that level.
Until then we have to acknoledge that 875.00 did hold today and we could see a battle within the 875 to the 930.00 zone for the next couple of days.
We did not get a trigger in SRS long today and looking at the chart if SRS breaks the $19.50 level we would be looking to enter our bull call spread near the $17.80 level.
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