10:38 am EDT:  The ES is much weaker than anticipated, having traded nearly back down to monthly S1 at 1084.75.  1093 to 1095 is now a sell area.  If the daily S1′s cannot support at 1083.25, we don’t have confidence that yesterday’s low of 1078.50 will hold.  The  Bernanke vote could cause some late day volatility.    Until then, things should quiet down.

The Precise Take – Equities poised to rally on any favorable news

Leaders Analysis:  The US Dollar Index managed to close yesterday just above its 200 day moving average, but is back to its closing level after making a new high overnight.    The EuroYen forex cross, which is usually negatively correlated to the Dollar, has also sold off after being up overnight.  30 Year T-Bond futures have corrected off the 119 6/32 high and are down to 200 day moving average support.  All in all, the leaders are slightly equities bullish.

Medium Term Analysis:  After making a new nominal low on the FOMC report yesterday, the ES rallied into the close, not unlike the Mar 6 2009 [corrected 9:22 am] FOMC Employment Situation day, which kicked off the 2009 rally.  Bernanke’s fate will likely be decided by tomorrow and, should he be confirmed, we would expect an equities rally.  Non confirmation could lead to a selloff.  Tomorrow’s GDP would have to disappoint strongly to get an equities selloff, and it would actually be more bullish in the medium term to get a rally off a 3% to 4% number than a 5% one.  Wildly bullish numbers on major reports have tended to get reversed after a few days.

Trading Today:  Just above the overnight high is very strong resistance from the monthly and weekly pivots and a high volume level (1106.50 to 1109.00), and this marks the upper end of the projected range today.  It will probably take either GDP tomorrow or Bernanke’s confirmation to…

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