Option Investor
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Equity futures were down hard last night, following Asian markets lower, but have rallied strongly since the low near 3:00 AM, especially since the sharp pullback low at 6:00 AM. Once again the rally looks "manufactured" and I don't think can be trusted. We've seen this too many times before where futures are rallied into the open as a method to create some liquidity to sell into once the cash market opens. Whether that will happen again or not is anyone's guess but watch for the possibility.

But looking at all-hours trading, ES has broken its downtrend line from Sunday night's high (a new high that was not matched by the cash market) and that could be a heads up that the pullback has finished. I prefer to use the cash market for analysis (or certainly confirmation) so I'd want to see ES break it's RTH downtrend line from Friday's high, currently near 823, to confirm we've got something potentially more bullish going on. This morning's pre-market high so far is 818.25. SPX's downtrend line from Friday is higher, near 832. A Fib projection for a larger a-b-c bounce off yesterday morning's low is near SPX 829.

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