Good Friday Morning, MPTraders! May 26, 2023-- Pre-Market Update: Today is the Friday before the long Memorial holiday weekend as well as the third-to-last trading day of May... Investors and traders continue to await news about a new debt limit deal although it seems that with each passing hour, equity futures (ES) are becoming less sensitive to the prospect of further delay or a stall that actually threatens a default. One wonders if Mr. Market is winking at us that a deal will be announced later today-- ahead of a three-day market holiday-- or sometime over the weekend? If so, then in the absence of a very negative headline that dashes hopes for a deal, today's price action could very well emerge as a 1-way Friday, owing to optimism about a debt limit deal AND because of the historically positive seasonal tendency of market strength on the Friday leading into a three day holiday weekend (Memorial Day, Independence Day, Labor Day, and Christmas Day).
From the perspective of my Hourly Chart, ES caught a bid around 4 AM ET at 4148 and has been methodically grinding higher to 4171.75 as we speak at 8:05 AM ET, as the index pushes up to challenge yest.'s rally high-zone of 4166 to 4175.50.
Should ES climb and sustain above yest's intraday high at 4175.50, my near-term pattern work will project immediate upside continuation to test initial key resistance lodged from 4185 to 4195, and if sustained, then onward to the 4210 vicinity which also will represent another test of the upper boundary of the 7-week April-May sideways range located at 4206 to 4227.
At this juncture, only a failure to climb and sustain above 4175.50 followed by a reversal beneath nearest support at 4145/50 will again throw cold water on the attempted rally off of Wed.'s corrective low at 4114.00... Last is 4168.00...