The ES continues to trade within the 1595 to 1620.50 range. More trading range activity is likely to occur within this zone heading into Friday’s market. A breach of 1595 opens the door to 1593.25, where programs may be tuned to buy the level on first test, so watch this zone closely.
Overall, the ES has had a very impressive relief rally after setting a low of 1553.25 early last week. However, there are signs that the relief is now exhausted. Yesterday’s sharp turnaround indicates a likely pull-back from current levels, but the first major line in the sand will be 1595. A break below this zone could lead to a move back toward the midpoint of last week’s range, which is currently 1583.75.
The ES is holding above short term support at 1595, which will be a key zone to watch for early directional conviction this week. If price continues to hold above this zone we could see another push toward a fill of the gap that was created the day after the Fed news.
Longer term, the ES remains very bullish. The weekly chart continues to show strength off the recent lows, which could lead to another longer term wave of strength.
As expected, the E-Mini S&P 500 finally made a run for our 1601 target Wednesday and put in a high on the day of 1601.25, which was hit with immediate selling on first touch. However, the market remained strong into the close, and continues to remains strong in overnight and pre-market trading. As a matter of fact, price just put in a new high on the day at 1604.75 and looks poised to test the 1608.50 level above.
