The Precise Take – ES trades down into weekly pivot overnight

Leaders Analysis: 30 Year T-Bond futures are flat overnight, with gold and crude down, and the US Dollar up materially, which are all in line with lower equities.  The lone dissenter is the EuroYen forex cross, which has strongly advanced through resistance overnight, indicative of increased risk appetite.  Whether this is merely temporary overall Yen weakness (the USD is strongest against the Yen this morning), or is a sign of equities strength remains to be seen; however, it is a warning to the equities shorts.

Trading Today: Overnight, the ES has found support around the weekly pivot (low of 1052.00) and, below this level today, we are intraday bearish, watching combined session S2 at 1049.75 and day session S3 at 1046.50 as potential reversal areas.  The Leading Indicators report is released at 10:00 am  and is the only scheduled news of the day.  An upside surprise is more likely to move markets as excitement over the “end of the recession” will build.  We’re willing to fade short a move in the daily gap/pivot area, that also contains contract and prior day points of control from 1061.00 to 1063.00, but want to see a quick rejection of the area to stay in the trade.  Price lingering in the upper daily range has seen many afternoon rallies recently.  If longs can get through 1063.00, there are two potential reversal areas above that will provide formidable resistance, 1065.65 to 1067.75 and 1070.00 to 1073.25.  We won’t fade long if the market heads lower until after 10:00 am, waiting to see if a directional move develops, not wishing to…

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