As I progress through some charts on a hot and humid Chicago day, I cannot help but notice where the S&P closed. First, lets look at some simple bar analysis. This looks like a base forming in the S&P, with today's low above the last 2 days' lows and today's high above yesterday's high. Now for some indicator analysis. Today, the S&P closed just above the -1 Std. Dev or Lower Momentum level. This puts the probabilities back in the Bulls hands as Bears seem to be struggling with keeping the market down. Bears had a real opportunity to close this market near new 2 months low's yesterday but could not seize the moment and the S&P rallied into the close. Let's talk Volatility. VIX closed just below 22, but closed above 20, there is still some fear in this market, rightfully so. The news coming out of Europe, regarding the Greek situation, has really been volatile. Greece could refuse to agree to necessary austerity measures. Germany and France could really put the screws to Greece, as they hold power at this point.
The technical pattern in the S&P set's up a low-risk long entry above the 1269 6/16 high and projects up to 1297, with resistance at 1290, which would be a great time to take off 1/2 and reset stop to at least break-even. Initial stops could be placed at 1253.75, which is 2 points below the 6/15 low of 1255.75, you know the ES needs wiggle room near high's and low's when it comes to stops. If your risking 15 handles, the target of 1297 gets you a 2:1 risk/reward, which is the minimum threshold for my personal trading. Have a great weekend.
Be Well,
Hemi
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