2013-01-31

$ES_F : 1498-1486 : Expected Day Session Range for EMINI


Month End Window Dressing Day

1520 still in sight but short set-up in play.


It seems like ages but it appears that short set-up in play yesterday worked to its target and if there is any fire power with bears, they might try to push this overbought market a little bit more. GDP numbers were a surprise to the market. Target area of 1520 is in sight now it would seem after a strong run markets might look for a brief pause. Today is month end so once again lot of choppy trades to window dress the first month performance.

Today I would expect 1498-1500 as initial area of resistance. I will update the comments section as the day develops. Factors affecting the rally are:

  • Markets are looking for a pause after successively making multi year highs. 
  • VIX has started ticking up and now above 14 handle. This is a danger signal for bullish side.
  • There are signs of fatigue developing for the bulls.

My initial bet would be for finding resistance at 1498-1500 to hold leading to a build up to 1488-86 and lower area. I would expect low of day in the region of 1486 area given 10-12 point expected range.

Main support for longs is at 1484-80 area and any good buying there would imply bulls still in control.

If after breaching 1480, the market is unable to rise above 1490 I would need to reject the bullish case temporarily and expect further move down. Similarly the initial line in sand for shorts is 1507-09 area. Remember we are still in major long set-up and therefore bearish trades, in the initial phase require caution and confirmation from intra-day set-ups. Any profits on counter trend trades needs to be taken quickly before the trend change is confirmed. If this short set-up plays out this will be first confirmed short set-up and that should make the game interesting.