10:47 am EDT:  The daily pivot was respected early, and the ES sold off a bit after the ISM non-Mfg report after nearly reaching the potential reversal area from day-session-only R2 at 1032.25 to the weekly pivot at 1033.25.  We are still willing to fade this area or the next one above at 1036.25 to 1038.50, depending upon price action.

The Precise Take – ES attempting to bounce prior to earnings season kick-off

Leaders Analysis:   The only material movement overnight has been in the EuroYen forex cross, which continued its gains after rejecting the 200 day moving average support line last Friday (bullish for equities).

Medium Term Analysis:  This week begins earning season with Alcoa’s release on Wednesday and, with very little in the way of scheduled news, the long term Treasury auctions will also be front and center, with the 3 Year tomorrow, 10 Year Wednesday and 30 Year Thursday.  We are inclined to be prepared for a weak showing in one or more of them that would give equities a needed boost and further distance the 30 Year yield from the 4.0% line.  If equities are able to rebound Monday and/or Tuesday, the 1043.50 to 1045.00 area will be key as it is the confluence of major Fibonacci, trendline and market profile point of control resistance.  If the ES can push above, we expect major short covering and a retest of the 1063 to 1068 area would be likely.

Trading Today:  Overnight, the ES was able to push above and stay above Friday’s point of control at 1022.00 (red line on chart on page 2), which has support just below it of the daily pivot/gap area and overnight low of 1019.50.  We would be early buyers in…

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