Pre market analysis 5-31-11 Tuesday

News: Consumer confidence @ 10AM, Chicago PMI @ 9:45AM

Trade plan and Price action analysis: (Price action) Last week saw ES gap down and consolidate at the lows of the bigger balance area and the cvpoc at 1310 at the time. Buyers held their ground at cvpoc and tried to put a rally together for a move up. Buyers stepped in on Thursday and pushed ES up into the range, breaking the 3 day balance area we were in. On Friday value established higher above Thursday’s value and vpoc shifted up as well. Buyers are in control at the moment and need to see this market stay above the 1323.50-1325.00 area very short term. A break below that could bring in a quick move down to the 1319-1320 area. Over all im bullish above the cvpoc at 1313.00 and a move below that could bring in more liquidation on the higher time frames. On the daily chart this recent downward consolidation can be viewed as bullish because the daily and weekly have not given any real reason to be bearish yet. I would need to see a break and hold below the 1313 level to shift my midterm bias to bearish. Globex has trended higher all night. Im not quite sure what that about but the buyers are clearly still in control.

(Trade plan) We have a few news releases out after the open that could give some movement after they hit the market. With the big gap up this morning we could see some good opps today. I will be looking for responsive sellers up here as we are opening way above value and ES could try and close the gap. If no sellers are present then we could see ES try and make a move up. My focus will be on the long side into support areas on my 30 min chart. The market is currently trading at 1342 area around the globex highs. I will be looking for support to hold but will be cautious up at these levels as the risk is more on the long side. Below i have the 1336- 1337.50 level i expect buyers to be active there. A break below that will bring Fridays range into play and im expecting buyers there as well. Im not expecting the market to get below the globex lows area and if it does this will be a sign of weakness buy the bulls.