$ES_F : 1544 - 1557 : Expected Day Session Range for EMINI

Cyprus Fears seems to be discounted in pre-market.

However caution is required until the dust settled.

Cyprus parliament has rejected the deposit levy leaving the crisis in limbo. No one knows when their banks will open and what will happen when they do indeed open. May be EU will relent and renegotiate and send a bundle of cash for bail-out without demanding bail-in. May be Russia will step up to the plate and bail out an old friend in return for military and gas exploration rights. May be Cyprus will leave Euro all together and go in the arms of Russia. And in all these uncertainties the markets are enjoying, completely reversing the fall yesterday. Is this a bull trap? Is this a sign of strength of the market? I do not know. All I can see is that markets are bullish and short set-up is again broken. I will keep a keen eye on news from Europe until the mess is resolved. There is FOMC announcement today which is not likely to cause much unless Bernanke starts talking about reducing liquidity.

Today again I would expect to find support at 1544-42 area building a move up to 1556-58 area or possibly making another high at 1560 or above. The line in sand for bulls it at 1536 which if breached can trigger a move down.

My hypothetical stock portfolio is flat as of now with short balancing longs and has done good so far since I started maintaining it. I am looking at a pair trade to Short GOOG long AAPL in equal dollar amount. 

The trend is still bullish and calling tops is futile. However please have a look at this post from longer term perspective which is keeping me cautious at these levels. The flip flop market action is also signalling a caution. An escalation of Cyprus crisis will certain pull back these markets.