Last week, the S&P futures (ES) had another poor close after once again being unable to rally away from the 1338 danger point. I discussed other indications of weakness last week in my post on weekly conditions (click here for that post). And, the danger is that if this market is unable to rally early in the week and it falls lower, we will see a likely upthrust on the weekly time frame.
The daily chart shows the levels and their importance. A break and close below the 1325.25 low put in on May 5th will serve to break the small demand line on the daily chart. There is little obvious support below this level until the bottom of the open gap is reached at 1309.50 and the April 18th low at 1290.25.
Should the market find support and rally back above 1356.50 and then the high at 1367.25, it will have absorbed whatever selling exists, showing renewed vigor, and we can look for new highs. At this moment I think this later scenario to be less likely given the last two weekly closes, the churning around and inability to push back up above 1338, and the indications of weakness I highlighted last week, but it is always important to have an open mind and to anticipate (never predict) the possible next moves of the market — both down and up.
Tomorrow night we will be conducting a free webinar on Deep Practice. I’ll be highlighting the value of Deep Practice and going through the market bar-by-bar to help you get a sense of what Deep Practice is all about and its benefits. You can learn more about the web seminar and register at the links below:
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