Good Morning Traders, actually up pretty early this a.m as I went to sleep early yesterday and now can't go back to sleep. So lets go over yesterdays action and then talk about what we can expect to happen in the future. If you have been following are analysis then you have profited previously from being short the break down of the consolidation pattern between 1320 and 1335. If you had continued following you would have been long from 1295 all the way to where we currently sit at 1334 on the S&P 500 Futures. The accuracy of this market that we have been nailing by adding this 4hr chart with our other analysis has in fact proven to be a good improvement to our system. We have played many different option trades and have shouted out many awesome stocks that have made nice moves. So lets analyze where we stand now!! We are currently very over extended from our backtest and bounce of the broken trendline from earlier in March. We bounced off that level as you can see from the arrow and that is exactly where we noticed some possible traps. For those of you familiar with my trading style and how I approach the market, you will see that those are clear traps on the backtest from some market participants that tried to get short. In turn we have had a major short squeeze which is sitting at a solid area of resistance @ 1335. This is the top of the range from the Consolidation that we could not get above. If we break above 1335 the next likely target is the 2011 highs around 1343.51. Tech stocks are showing major strength and the Dow Jones has hit new 52 week highs. Oil , gold, and commodities are in nice uptrends and the dollar is in a downtrend. Doesn't this sound like an inflationary environment to you ?? All we can do is trade what we got so we try to focus on are rock solid chart analysis. Since we are overextended we could pull back down towards that 1320 support and trade in that same congestion range until we build enough momo to break to new highs. I'm pretty sure we are not just going to but through and run str8 up to new highs and if we do I rather wait to get any longs because the overbought levels of these charts. Fridays market are close so look for them to maybe float this market into the holiday weekend. GL
/ES S&P 500 Futures Chart
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