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July 6th, 2010: Update 1 – Pre-Market

Posted by pugsma on July 6, 2010

7:55am EST:  ES Futures dipped to 1003.50 (1007.50 cash) late in the evening on Monday, July 5th.  This was a new low below the July 1st cash market low of 1010.91.  This is one of the paradoxes of trading cash versus ES.  ES can often make a new low (or high) that never materializes in the cash market.  The cash market low of 1010.91 from July 1st could very well hold as the P2 low per my call from July 2nd EOD.

But never-the-less, the key thing here is that a major reveresal has occured in the ES Futures overnight.  ES put in a clear 5-waves down and has now risen to a high of 1027 (1031 cash) early this morning.  ES has clearly busted out of a the 2 week long tight down channel.  This is a 23 point reversal and is very important for the short to intermediate term market direction.  We need to see the cash market climb above 1030 near-term and then exceed 1040 and close above 1040 to complete the reversal for the intermediate term.

SP-500 ES Future (7:30am):

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