Wednesday Update
Today should be a revealing day of trading. The markets have had an extended run to the upside after breaking out of the consolidation early last week. Monday the ESH10 opened the day session at 1110.50 and closed at 1007.50. This was the first trading day in 7 that recorded a close lower than the open. This is often a signal that the market is losing momentum and this occurred in proximity to expected resistance at the 50 SMA. Then yesterday the market once again traded from up to down and closed down approximately 10 ES points on the day, marking the first really down day in some time.
The market was able to rally back some late to close off its lows however and normally after a good momentum move up the first pullback is a buy. The market is set to open just above its 8 EMA at 1096.30 and the 20 EMA is at 1093.50. The 8 is back above the 20 and we are watching pullbacks on Wednesday to see if support does in fact come in near these levels. Tuesday’s low of 1090.25 could be tested again as well and will be an important area if tested.
