$ES_F : 1473-1483 : Expected day session range for emini

Chance for longs to confirm the set-up.

Attempt at new highs. Bullish.

Markets are likely to find support at 1473 and build next move up. Markets have finally broken out of the range and now the top of the range at 1468 is support. To continue the bullish set-up a confirmation is needed today otherwise the break would seem a false breakout. If markets show sign of strength in support regions, the next move to 1500-1526 area can begin.

Today I would expect 1473-70 as area of support. I will update the comments section as the day develops. Factors supporting the rally are

  • Markets have broken out of a trading range. Top of trading range is now support.
  • VIX term structure has flattened slightly. 3m spread is 2.80 
  • The rally which started from 31st Dec 2012 has met its initial target at 1468 but now appears to be extending. This should carry the momentum in favour of longs for sometime.
So far shorts have not managed to show a follow through and hold a short set-up for more than 1 day and therefore the balance remains on bullish side.

My initial bet would be for minor support at 1473-75 area to hold leading to a build up to 1482 and higher area. I would expect high of day in the region of 1483-85 area given 8-10 point expected range. Today is options expiry so trading is likely to be choppy and futures are likely to be pinned in later half of the session.

Main support for longs is at 1468-70 area.

If after breaching 1468, the market is unable to rise above 1474 I would need to reject the bullish case temporarily and expect further move down.