Shorts and longs have each entered in kind within 1 point of the levels identified in our last post, however, we have not gotten the expect[ed] breakout and are seeing low volume with new high and low Tick readings unable to generate new highs or lows in price.  Whether the session ends with a fizzle or a pop is anyone’s guess now.

The 901.50 CT long is cancelled as it is too close to the 902.75 morning low and selling could pick up if it is exceeded.  The ES has consolidated and stayed below VWAP most of mid-day and we should see movement pick up by 2:00 pm EDT.   Shorts will likely fade a rally at 911.00,  and don’t want to see the morning high of 912.25 get exceeded.   Longs will enter at 904.25 and don’t want to see the morning low exceeded.    Trading the range breakout could be dangerous to the downside as there is a lot of support around 900 and it is probably best to wait for pullbacks to see if the 50% retracements from the breakout level are respected.  915.75 is still the number to beat for longs.

Chicago PMI worse than expected at 8:45 am dragged the market down.  Consumer Sentiment at 9:55 am better than expected has helped establish support at the 50% retracement at 902.50 from yesterday’s afternoon swing low at 894.00.  Internals opened bullish, but reversed after failing to take out Globex highs and into the PMI report.  Longs want to get above the 61.8% retracement from Globex highs to morning low at 909.25.  As we write, shorts have sold off the 50% retracement at 908.00 (also VWAP) from this same range.

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The market is trending lower on low Ticks approaching 1,000.   If POC support at 891.50 does not hold, the market will likely head to the next support area of 883 to 885.  Volume is slightly above average relative to the last ten sessions.  Gold is on the rise and is testing last week’s highs.  If it breaks up, it could stall equities or lead to a selloff as rising interest rates will be factored in.   Russell 2000 is the weakest.  Nasdaq is testing overnight lows.

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The NQ is testing May 7 1437.75 high (now at 1427.00).  If it can break, we expect the ES will follow.  Nasdaq Bank index and Russell 2000 have broken up through their consolidation areas, but the Russell has not yet posted a new high.  Watching those three should give a good idea of whether the ES will break up.  If they start to roll over, we don’t think the ES will break.

A mildly bullish Existing Home Sales report at 10:00 am has lead to a retest of the overnight highs, but is now retreating after a failure to break through.  Should we see the 905-906 support area taken out, we will likely head to the 898-899 pivot area.  Volume relative to the last 10 sessions has been slightly above average.  NYSE adv:decl ratio dipped below its trendline support briefly before heading back above.  A breach has been a fairly reliable indicator that the day’s high is in.

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…as a 5 min pivot and std dev 1 of VWAP has been taken out to the downside after hitting resistance close to critical 911.75 resistance.  Look for rallies that are sold off at the 50% retracement from the 911.00 highs as additional confirmation, along with <-800 TICK readings (none yet today).