Giving Up The Gap
The equity index futures markets gave up their outsized overnight gains quickly this morning in a one-way trade straight down. The SPH traded all the way down to 1345.50 before being able to recover some of its losses. However, the break seemed much more dramatic in light of our opening price of 1369 — exactly 100 points lower than the post FOMC rate cut high of 1370. While this may not show overall weakness, it does lead to speculation that the market will have a difficult time trading up to 1400.
As for the afternoon, I am looking for action to subside dramatically and the market to settle between 1348 and 1355.