Today was a failed auction. That means that prices ticked slightly above previous high's and then reversed. This is very bearish and will likely send us back down to the bottom of the recent trading range. I'm not going to rule out a move to the low 1140's in the ES. This scenario will be even more likely if price Breaks below 1155.00.
The number one thing supporting this market is the "Bernanke put". There are six more POMO auctions to be conducted by the FED in the next 6 weeks. A recent article I read on Zerohedge.com said that the FED is actually running out of bonds to buy! Traders I have been talking to say that quantitative easing 2.0 isn't going to be announced until after 3rd quarter GDP numbers. In my mind its a done deal though. Most traders believe that the expectation of more liquidity has baked in about 50-100 points in the S&P's. That kind of market drop during election season would be a nightmare for the ruling party. Keep that in mind.
Overall the market behaved as I expected today. following the levels I outlined yesterday. We topped out at 86 and found support at 67. The latter being the mid point of yesterday's rage and the the weekly range dating back to the 11th of October.
My trading today was poor. I took one long trade this afternoon buying one contract at 77 and another at 76. Price moved to within one tick of my two point stop before reversing. I was lucky to get out of the trade with a profit. My entry was horrible and I did not have the proper feel for the market today. I was supposed to be studying for my mid-term exam in Strategic Management and just wanted to make a quick profit. After I took my profits I shut it down for the day and hit the books. In the book Trading in the Zone Mark Douglas says "When in the zone trade, when not, Don't". I think that book paid for itself today. Good luck tomorrow traders, and thanks for reading.