The ESZ firmed up on the close and was up 4 handles in Globex at 8 p.m. last night. The big concerns were that oil could tank and we would get negative economic data out of China. Neither played out; oil is up 40 cents this morning and the Chinese factory sector rose to a seven-month high.
In turn, the S&P is trading near the 1750.00 level this morning. The question this morning: Is a one-day pullback all the S&P has? We don't think so, but as traders we are not paid to fight the markets but go with the markets. That said, we see big resistance at the 1755.50 level to 1757.50 and lean to selling rallies into the level. Our view: Sell the early rally and buy weakness. It doesn't seem like the bulls are tired yet.
As always, use stops and keep an eye on the 10-handle rule. Don't forget to catch MrTopStep on The Closing Print video found under the OptionsTV page (top bar). We report directly from the SPX pits, wrapping up the day and positioning for trade tomorrow.
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