Beware the Huge Snapback

Beware the Huge Snapback

ES tanked overnight holding support at 1016, rebounded and is now testing resistance at 1026 and from trendline B. I'm speculating that ES drops and tests 1012-1016 intraday before rebounding and finally breaking through trendline B and consequently trendline A. Another key support level is ES 1001- this is the 38.2% retracement level of the entire rally from March 2009 to April 2010. I will be adding long positions throughout the day, although I am going to maintain a minimum of 75% cash in my portfolio.

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