ES Morning Update July 1st 2016

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Rising trendline support for now.

Negative divergence forming with lower highs.

The futures rallied up yesterday and stopped around the 2090 resistance but this morning they are acting like they plan to break it and continue higher.  Next resistance is 2100, then 2110 from the 6/8 high, and finally the double top at 2120 from 6/23.  On the downside we have 2075 and then 2060 as support, but first the rising trendline of support will have to breakdown and considering this is the last day before the 4th of July holiday weekend I would be surprised to see much downside.

What to do today?  Hard too say until we see some weakness.  You just can't short this without seeing something in the charts first and let's face it, the market aren't showing nothing but very overbought right now.  So far this still looks like some giant bear squeeze, but you can't go long up here... nor short it as you don't know where it will end yet.  It's really hard to believe how they can run the market straight down over a 100 SPX points and then straight back up over a 100 points without and real pullback.

On a positive note for the bears there was a very large amount of volume yesterday on the SPY, about double the usual amount.  I doubt if it was bulls buying but more likely it was a lot of bears getting squeezed out with their stops being hit.  This suggests a pullback at least is near as without bears to squeeze it's pretty hard to continue rallying up higher.  So possibly we that rising trendline of support break today and a move down to 2075 or 2060 (on the futures) happen.