The daily pivot area of 894.75 to 898.50 from the morning report provided early resistance (high of 894.50), and the ES has nearly approached critical support of 875 to 880.  This is a general area because the lows will differ on the cash, SPY, Sep 09 futures and continuous futures.  NYSE adv:decl ratio, which began slightly positive is now slightly negative.  If we approach 880 in the ES without the ratio getting below -3.0 (-1.93 now), we would finally fish for longs, but only after a bounce that retraces and does not retrace more than 61.8%.  Shorts can enter at from 887.25 to 889.00, but should consider tight stops and profit targets as the markets are getting oversold into heavy support

The Precise Take – Approaching critical support into FOMC Meeting

Of the two scenarios we outlined yesterday with a bearish bias, the bearish one is indeed unfolding.  To reiterate, we are expecting critical support for the ES at 875 to 880 to be tested prior to the FOMC announcement at 2:15 pm tomorrow, and possibly violated, at least momentarily, to shake out weak longs, after which time, we could see a…

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