10:43 am EDT:  After a test of yesterday’s high, the ES failed on a disappointing Pending Home Sales two points below at 1123.00 and has now broken the lower end of the projected range.  It will probably find some support in the 1113.00 to 1116.00 area, but we made the lower end of the projected range higher than usual because of the risk of a larger selloff.  Indeed, there is a head and shoulders developing on the 60 minute with 1113 to 1116 as the neckline depending on whether day-session-only or combined session data are used.  The daily pivots at ~1119 should now act as resistance.  A break above keeps the medium term rally in tact.

The Precise Take – Equity futures poised to test yesterday’s high ahead of Employment Situation

Leaders Analysis:  As we noted intraday yesterday, the US Dollar Index broke major support and sold off sharply.  The bottom coincided with the end of the equities rally yesterday.  Overnight, the 20 day moving average, which prior served as support, became resistance.  The Dollar tends to consolidate after important moves, so we don’t expect another major move until tomorrow’s Employment Situation.  The other leaders are not making any moves of note, so the leaders are equities neutral today.

Medium Term Analysis:  Not much to add from prior day’s commentary.  Focus will be on tomorrow’s Employment Situation report, which is expected to be bad because of the February blizzards.  The ES is at a precarious point.  It needs to soon…

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