ES Update 10-18-10

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(click images to enlarge chart)

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The focus continues to be on rising short-term (ST) trendline support presently near the 1161 area.  That line, when crossed, will likely generate profit taking, and would be the first sign of any short-term weakness.

ES has been bouncing off a very short-term (VST) support shelf at 1164.50–and the next target higher remains 1203 for all timeframes–with no significant resistance between current price and that target.  As I mentioned previously, that can be a double-edged sword if insufficient buyers are willing to buy an extended market after the bears have been forced to cover.

On the daily bar chart, I have drawn a vertical blue line marking November 3rd, which is the next scheduled ‘big event’ for the US.  That is the date of the next Fed decision and the day the results of the mid-term elections on November 2nd will be known.  If pre-election polls are to be believed, the present ruling political party in the US (Democrats) stands to lose a significant number of seats, and it will be interesting to see how the market responds in the event of a major change in the balance of political power.

All trends remain up > 1147.50