The e-mini S&P 500 ES gapped up strong after news from Europe that Greece had submitted a new debt proposal the creditors found “encouraging.” No details, and no official response, just a press conference, but hope was enough to float all the markets during the early part of the day.
By lunchtime some of the obvious problems with the fairy-tale ending became apparent and – after making a new recent high at 2122.00 – the market closed at 2113.00, almost two points below the previous close.
Today
There is a lot of confusion about what, if anything, has been resolved; conflicting reports and denials are everywhere. Today ES will likely watch for confirmation the Greek proposal — essentially an agreement to borrow more money to pay the interest on previous debts – is accepted. Having bought the rumor, we’re expecting the market to sell the news if/when a final settlement is announced. Otherwise ES could go sideways within yesterday’s range to wait for more definitive announcements.
2122-23.50 – the point where the rally stopped Monday – is the neckline of a short-term double bottom pattern and the intermediate-term resistance line holding the market down since February.
A move above 2126.50 could push ES back up the May high 2135-36.50. A failure to break through the resistance could prompt the ES to pull back into the 2100 area to retest the 20/40ema lines.
The major support levels: 2085-88, 2062-59.50, 2053-50.50, 2043-42;
the major resistance levels: 2123.50-2121.75, 2135.50-32.75 and none
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Chart: S&P500 mini-futures (ESU5), June 22, 2015
