ES Morning Update June 24th 2021

We got the pause day I was looking for yesterday and this morning we see the futures up at a double top area trying to breakout. If they do we could see a stop run on the bears that are stop the all time high with stops placed above that level. However, all of the various time frames I look at show the market overbought again.

In fact it looks very similar to the 5/18/21 high before that pullback of 80-90% happened into the 5/19 bottom. The move up from 5/12 also looks similar to the move up we’ve had from the 6/20 low. This is what I was talking about in yesterdays post that the bulls did not want to do. They got themselves overbought and into strong resistance.

Of course I have no way of knowing if some news event comes out and causes a fast spike through it, which then would trigger the buy stops the bears have overhead and get a squeeze going. This is certainly possible, but without such news the technicals tell me that we will not go up too much more and should pullback Friday.

A quick look at the open interest on the SPY and it’s quite heavy on the calls and light on the puts. The 425 (4250 SPX/ES) strike price has the highest with almost 90,000 calls and 5,000 puts. At 420 we have 33,000 puts and only 13,000 calls. You can’t trade off this data alone of course but with what I see in the technicals, that tell me we are getting overbought, a pullback to 4200 tomorrow would be my best guess. I’ll keep it short today and end it here. Have a blessed day.