Will Powell's Presser Break the Trading Range?

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Our View

There are a few things that tend to happen when the futures close weak. Two of those things are: They generally rally on Globex and a lot of times when the ES gaps lower after a weak close, they rally.

This is especially true on Mondays or early in the week when volumes are lower. What happened yesterday fell exactly in line with the PitBul’s rule about the ES tending to rally early in the day and early in the week.

My opinion is that the volumes tend to start out the week on lower volume and when you have shorts in the mix and the selling dries up, the ES ends up in a short-cover rally. I also know when I go with a straight “sell the rallies” approach without “buying the weakness,” my chances of being right fall considerably.

Yes, there were some good rips to sell, but the best trade of the day was buying the early pullback at the 4490 level. The second best was selling the rip when the futures rallied up to 4514.50. It was a narrow, low-volume chop.