We can see that the S&P 500 e-mini (ES) futures have pulled back from their highs late yesterday afternoon, following a trend day to the upside. The area around 1087 has held support several times during overnight trade, so it will be important to see how the early morning market treats that price level. Ability to stay above the overnight lows will target yesterday's highs and the R1 level (as outlined in the Twitter post). Interestingly, that R1 level is almost exactly at the bull market highs, so should prove to be an important price level. We're not seeing strong moves in the correlated asset classes to this point, so these will be worth watching for possible breakouts from their overnight ranges. I'm also watching those relative laggards--financial and small cap issues--to see if they can pick up relative strength on any follow through to yesterday's gains. If so, that would weigh strongly in the bulls' favor; if not, it could set up major divergences on any move to fresh bull highs.
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I started long this AM on an expectation of gap fill, and profited on that movement. However the weak and tepid bull action this morning with extremely mediocre $TICK on the move up kept me watching for a petering out and breakdown of the move. I started entering short at 1093.5 and have been "digesting" the move down in bite-sized chunks. It will be interesting to see if 1087 holds or not. . .
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