Bulls Maintain Control as Market Holds Near Breakout Levels

The market closed higher today. The move higher was driven by a number of factors, including stronger economic data and expectations that the Federal Reserve will not raise interest rates in June. However, the looking debt deadline is not in the review mirror yet.

Key Points

1. The market broke out from the tightest range seen since April 2017.
   
2. The next level of resistance for ES_F is at 4175. If ES_F can break above this level, it could open the door to further gains towards 4200.
   
3. The next major economic event for ES_F is the Federal Reserve's meeting on June 13-14. The Fed is not expected to raise interest rates.
   

Bull Case

• As long as the 4155-47 breakout back-test area holds, bulls are in control. If it fails, bulls will want to recover quickly from 4135 support.
  
• Generally though, as long as that backtest holds, bulls are in control and we likely chop, bull flag, then continue to push to 4195 megaphone resistance.
  
• Possible pullback there then on to break the May highs.
  
• In terms of spots to add on strength, I will be watching for bull flag formation.
  
• We have the flag pole with todays rally, and the flagging would occur under 4178-80 and above 4166.
  
• If this flag can develop overnight, I may consider buying it in the morning.
  

Bear Case

• Several levels need to fail for there to be any short-able bear case.
  
• The first warning, though is the 4147 breakout back-test.
  
• 4125 support needs to crack. However, a breakout short, perhaps 4122, to work down the levels to 4100 and lower.
  

Final Thoughts

The market is in a bullish trend, but it is important to be aware of the risks. The market could pull back in the coming days, especially if the debt ceiling isn’t raised, and it is important to be prepared for this possibility.

Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.

Comment:

🕤 Following a 60-point rally 🚀 yesterday, ESM2023 / SPY kicking off with a solid base.

Bulls guarding 4166 🛡️

Action between 4166-4181, priming for a charge to 4195, and potentially 4205+ 📈

If 4166 fails, watch for a back-test of 4150. 📉

Remember, it's OPEX week 🗓️ 🎢