ES had some profit taking movement in the early morning session. Later it bounced from its major support level and anticipated the FOMC minutes report. Finally it hit the high level of May 6, 2010 and reversed down to 1164.50 for yesterday’s close.
The momentum remains on the upside even though the price can’t pop much higher than the previous high. But the buyers keep pushing so the strength is still there. As long as this strength continues, the market can move higher inch by inch until the upside stream runs out.
The trend remains up. The current rally is very similar to the rally from Feb 5 low to April high. That rally lasted 55 days; the current rally has continued for only 29 days. Based on the time symmetry, there is still lots of time for buyers. In addition the Fed continues to talk the market up with hints of more easing, encouraging investors to hold their positions.
Intel’s earning report was out after the market. The overnight trading will set the tone for today’s trading. It could be a small pullback day if ES can’t break out 1169. But under current conditions the downside won’t last very long or go very far
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ESZ0 Daily chart
ESZ0 Intraday – 60-minute bars
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