Today: The S&P 500 futures have cracked off from the high prints of this
move that were finally put in on Friday. The high in the June contract was
1152.00, and in the March, the contract we had been watching this last leg up,
took out 1148 and put in an 1159.50 high. Of course these high prints have
come once again in “off-cash” hours, so we are back to the argument that the
high is not in, and we will have to go back up there and confirm during the
regular hours. However as mentioned in Friday’s letter, a daily support line
check is over due, and this crack off may be the first step toward that. The
daily support line for the June contract resides today at 1124.50, more than a
fair distance away, especially with an ATR of 10, but the line is advancing daily
buy almost 2 ½ handles, so we may converge the next couple of sessions. The
key level to point us in that direction, the buystalk “shut-off”, today is at
1141.75, and thus that is the key “pivot” in sentiment for today’s trade. If
above 1141.75, I have resistance beginning at 1143-1143.50, and then 1145
and 1146.25, so out of the gates it does not appear that we will get much
upside if we stay in buystalk. If below 1141.75, the first support is at 1138.50
then 1135.50. The key will be to be short as close to 1141.75 as you can, and
let the short side sort itself out.

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