August 11 2010 ES Prep Posted

Price has completed the test we were looking for yesterday. It turns out all of yesterday's action was price just drifting in preparation for the 1103.75 test. There are 2 scenarios I am watching today. The first is for a shallow pull back and then extension of 1103.75 down to 1185.00. Price is stretched to the long side and due for a correction. This is a key area. If price is going to sell, it needs to cut through 1103.75. If it starts to hold, the the significance of the area will build and price will move up and off this support. I will be looking for a sideways market 1103.75 - 1127.00 in this scenario. This is August trading but there is structure for a significant selloff to occur. We have to get through 1103.75 first and that could be a fight.