10:20 am EDT:  Per our morning report, we are now a bit cautious with longs because of the negative reaction to the Consumer Confidence Report, however, the ES bounced to recover about half the initial loss after taking out the overnight low by two ticks (low 1055.50).  Accordingly, longs can enter in the 1058 to 1059 area, but we would not stick around if the 1055.50 low is taken out by more than one point, wanting to see the ES trade above 1062.00 by 11:00 am.  Otherwise, chances of a rally to test highs or exceed them is less likely.

The Precise Take – ES and T-Bonds attempting to break through critical resistance

Leaders Analysis:   Many have noted the break in correlation between the USD and equities, both up yesterday.  The divergence between equities and the EuroYen that we noted intraday yesterday has mostly righted itself overnight.  More importantly, though, 30 Year T-Bond futures were able advance and are suspended at critical resistance.  It would be very unlikely for both T-Bonds and equities to make new highs this week, so one should give soon. 

Trading Today:  Yesterday, though the rally was impressive in the ES, it was not able to reach or trade above the highest volume point of control at 1062.75, the point at which today we become outright intraday bullish.  Overnight, the ES oscillated around yesterday’s point of control at 1058.25.  We will look to be buyers in from the…

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