The market had its seventh rally day in anticipation of QE2. We are also waiting for Mr. Bernanke’s speech on Friday morning at 8:15am. The public wants to get Ben’s confirmation that Fed will continue trashing the US$ and will soon launch the QE2 program.
The volume came back to the upside to support the price rally. But the momentum indicators are moving into overbought territory. As soon as ES reaches its desired destination, a small pullback into 1162-63.50 range should be expected.
The major medium-term resistance is at 1185.50 – 88.75, but the market has taken out a series of upside targets in this rally. The bubble will pop at some point, and every new high on weak volume looks suspicious. But medium-term shorts have been slaughtered in this rally, and investors are wary about initiating new short positions, especially during the option renewal choppiness.
Nat’s short-term traders should refer to the active trading strategy each day for precise entry levels. Non-members can see more of Nat’s market analysis at www.naturus.com. Free registration required.
ESZ0 Daily chart
E-mini intraday chart – 60-minute bars
