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Another day passes without the Dow closing at new all-time highs. It'll be a few days longer yet until the Nasdaq and S&P both do the same, but why ruin a good media story by cluttering it with detailed facts?
Anyway, we should expect to see a new closing high in the Dow before market action heads off into the next directional push. Today marks the end of this quarter, new money flow next Monday could start next week off in upward ascent, too. One way or the other, media pundits will likely get their story climaxed. Hopefully it's sooner than later so we can all move on to more important matters in the market.
S&P 500 futures bobbed around in a 7.5pt total range yet again. They flagged lower to S1 values by lunch, and then bobbed their way back to R1 values by late afternoon. A listless, lackluster day where price action remains pinned to the window dressings by big money funds who create their own performance paychecks this way. Typical and predictable, each month & quarter!
Russell 2000 futures traced the same general pattern, albeit in a much wider dollar-range value by comparison. Early failure at R1 led to a trip down below S1, then back to the pivot pin. As with all other stock index markets right now, small caps await the next directional move to come.
S&P 500 cash index prices at new year 2006 highs. Next magnets above are in the upper 1360s and then 1390+ zones.
Meanwhile, semi-conductor sector remains way below current year highs. Right now price action wedges for the next move ahead after failing initial tap of 62% hi-lo swing and 250dma value. Countless tech bulls and other market watchers are eyeing the 475 level as green light for a major market rally to confirm. We could see that at any time... and we probably MUST see that for a sustained rally to emerge.
Summation
Today could be a low-range venture. Unless buyers step up in a big way, more sideways chop on program-driven surges is probable. Next month has the tendency to be highly volatile and active. September certainly was not. The SPX has a total range of 41 points for the month, traversed in rather dull fashion. Once the end-quarter pins are removed after today, things could get interesting in a hurry!
Austin Passamonte is a full-time professional trader who specializes in E-mini stock index futures, equity options and commodity markets. Mr. Passamonte's trading approach uses proprietary chart patterns found on an intraday basis. Austin trades privately in the Finger Lakes region of New York.
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