The levels were respected well this morning. The ES had moved up to 18.75, beyond the top of our 16.75/18 level and gave a full rotation before selling off. Unfortunately, we did not see a clean short setup at this level. Before our 12.50 / 12.75 level could be reached, it was news time. The consumer confidence number came in at expectations and injected volatility into the market. After rising to 1117.75, the ES dropped into our 9.75 / 10.75 level. The second rotation down in the level had heavy buying and setup a good long trade opportunity.
It’s difficult to say whether the rest of the day will continue to be rotational or start to take on a down trend. Most of the earnings and economic news have been good over the last two weeks, however we are reaching a point where we might be a little over extended. The 1018 area on the daily volume comp is the start of a major LVN area up to about 1026. Price was rejected there pre-market. The center of the daily volume comp HVN is around 1094, thus the ES has some room for moving to the downside. Wait for new levels before any additional trading. If momentum starts picking up to the downside, then the safest thing to do is to stand aside.