Yesterdays post we talked about the 915.00 level in the ES as short term resistance. Today the market made a high of 913.00 then dove 21.00 points to close at 892.00. We also noted that we are in a range with the low of the range being 875.00 and the higher level of the range is 930.00 and that we could bounce around between these numbers for the next few days.
The fact that 915.00 held the market down sets a short term bearish tone to the markets, and we wouldn't be suprised to see more downside action tomorrow. The 875.00 level will be a battle but if we break that support bigger funds will take note of that and probably stop themselves out of long positions.
Some of the stocks that have lead this move higher such as MON and POT got crushed today (MON) chart is looking the worst of them, but this could be a sign of profit taking as the ES can not break through the the high side of this range.
On the 60 min ES chart you can see we are making a flag type pattern and also forming a wedge, this pattern can still go one more time to the upside , but we would be a seller of that breakout if it happens. There is both time and price resistance for the rest of the week meaning: if we cant break out to new highs by the end of the week, we will most liekly start the correction that everyone is waiting for.
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