ESH2 Daily Chart

ES ran out of the gate in the pre-market due to good early manufacturing reports from the euro zone. Later a steeper-than-predicted increase in construction spending added fuel to the upside to push price up near last month’s high. But the ES could not hold the gain, and dropped almost 10 points — almost half the daily gain — for the close.

Based on the daily chart, ES had a strong momentum move for the first day of February. The price action was bullish. But the volume remains low. The current rally is an artificial move created by invisible hands. The price needs to move up to 1346-50 range to have another short squeeze effect. But the majority of investors are still on the sidelines; the monthly volume was the lowest for a January in recent history.

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