Pre-open eMini SP 500 Morning Report 6.14.10

This is a guest post from Precision Capital Management

The Precise Take – Markets showing risk acceptance

Big Picture Analysis:  The rally on the close Friday was constructive for the bulls, and with the ever-unfailing Sunday night rally, the ES is back to its late May/early June double top area of 1099.00 to 1103.00 (cyan, below).  Considering the proximity of the 200 day moving average (1097.25) and monthly pivot (1104.75), we can expect short sellers to enter today and this will be a critical test of their strength.  They will need to quickly get the ES below its 20 day moving average and high volume level area, from 1178.00 to 1179.00 to discourage new longs.  A close above 1104.75 would confirm a W bottom, and using the neckline rule for this pattern would suggest a rally to test the May 13 1170.00 interim high.  The problems that took down the risk markets have not gone away and will resurface, but…

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