Last week was a good one for bulls, assuming you came into the week with a mitt full of longs. The E-Mini S&P 500 futures (Es) gained near 51 handles, or roughly 2.5% on the week.
Much of the week's advance took place during the overnight session, which, as we know, is never something regular session participants like to see. In any event, a 2.5% advance is a heckuva gain, especially when you consider how traders were acting just one week prior when it looked like Greece might spontaneously combust at any moment.
The coming week's economic calendar is virtually silent until Wednesday, allowing traders to focus the majority of their energy on a heavy earnings schedule. The week's earnings barrage kicks off with Halliburton (HAL) and Morgan Stanley (MS) prior to Monday's regular session open. Then, after Monday's regular session close, we hear from IBM (IBM), Canadian National Railway (CNI) and Zions Bancorporation (ZION).
Turning to Monday's Es auction, we're faced with an instrument that's rallied 50-plus handles in a short period of time and is bumping into a multi-week downtrend line. The short-term momentum is clearly in the bulls favor, but given this market's tendency to lose all momentum once new life-of-contract highs are logged, do you really feel the urgency to load the boat? I certainly hope not.
An early week pullback that consolidates against the 8-day or 21-day exponential moving average would be a healthy development, perhaps giving buyers a moment to catch their breath before making an assault on new highs.
As far as day-timeframe positioning is concerned, my primary area of interest at Monday's open is likely to be 2117.25. All trading above that level keeps the focus on 2122 and new highs.
Failure to hold the line near 2117.25 opens the door to some early weak selling and shines a light on 2110 and 2103.75. As far as dip buyers are concerned, the first area I'd be particularly interested in wading into is 2103.75.
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