ES had another inside day move as we expected yesterday. This sideways move mainly is waiting for today’s GDP report.

There is a small triangle pattern formed by higher lows and lower highs in the past six trading days. The pattern itself is not a bearish pattern. It is a continuation pattern. Our CIT day on May 26 made a low at 2096. If this low is the ultra-short-term low, it could take ES to a higher level before our next CIT day on June 6.

Today is the last trading day of May; it is also Friday and it is also the monthly option expiration day. In the early morning the GDP and other key economic reports could rock ES for a while.

2125 is a control line for any upside move. A move above it will eliminate the possibility of the month closing price pulling back down to the 2105 level.

If the GDP report is better than expected, the fear of an interest rate increase may return and knock the price back down to the 2100 area, especially if the ES does not move above 2125 in the early sessions.

For the upside, the ES may attempt to reach the 2134-36.50 area. However the option price indicates ES will not close above 2150 even if the price attempts to move higher.

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