11:10 am EDT:  So far, a quiet day, as expected.  The ES headed down initially and, though it bounced a few points off the lower end of the expected range at 1105.50, it took Friday’s day-session high of 1104.00 to provide more substantial support.  A new nominal low in the value area of 1101.25 to 1103.25 is still possible and, should the ES head higher, we would be surprised to see 1111.00 exceeded.  Careful entering positions in the middle of this range.

The Precise Take – ES at highs again ahead of quiet news day.

Leaders Analysis:   The US Dollar is showing strength lately, and this is what is likely limiting equities gains during the day session.  There will be strong downward reversal days that allow equities to trend, but until the short term trend reverses down again, intraday equities gains are likely to be limited.  The EuroYen reversed the upthrust it made on the Dubai news overnight and is not confirming equities strength.  This too will likely limit the possibility of a trend up day today in the ES.

Medium Term Analysis:    With no major news today, traders are looking ahead to Wednesday’s CPI and FOMC Announcement.  The Fed has been increasingly announcing policy changes through inter-meeting press releases, so we are expecting a generally dovish (equities bullish) announcement.  Assuming CPI comes within or below consensus, there should be little to encourage the shorts this week.  A hot CPI could, however, derail the bulls’ plans.

Trading Today:  Because the frequency of intraday moves has been shrinking, identification of the potential range is all the more important.  Overnight, the ES traded to just above weekly R1 at 1112.75 (actual high of 1113.00), after which it sold off and found support at a tick above day-session-only R1 at 1106.00.  We will play the expected range, looking for a long between…

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