10:25 am EDT:  Chicago PMI was outright bullish and Consumer Sentiment improved, but was within consensus.  In a bit of market dejavu, the ES is down to its 20 day moving average on news that Goldman may face a criminal probe.  The difference between today and two weeks ago is that the distance to fall was not as far.  There is strong support from weekly S1, long term high volume level, and day-session-only S2, from 1190.00 to 1192.00.   A strong reaction off this level or above suggests this is just another mild shakeout.  If 1190.00 does not hold, there is no major support until 1182.75, at which point the recovery is in jeopardy.  Intraday resistance is now 1198.25 to 1199.25 and the initial breakdown zone at 1200.50 to 1201.25.

The Precise Take – Markets quiet after consensus GDP

Leaders Analysis:  The US Dollar Index and equities are both down slightly from the overnight highs on a consensus GDP.  The EuroYen has rallied into resistance.  No clear equities bias from the leaders today.

Medium Term Analysis:  Yesterday met all of the qualifications and then some to suggest that the worst is behind.  It’s important to be on alert for what can go wrong for the bulls, however.  The range has expanded each of the last two weeks to form another broadening megaphone pattern, with a larger range than the one that formed mid-January.  This suggests two things.  The true breakout area is about ~1220 in the ES, not the 1216.75 current contract high, and another violent move to the downside prior to clearing 1220 will probably get more follow through and signal a correction.  Unless and until that happens, we are bullish over the next…

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