After Three Up Days And A Trend Day, I’m Looking For Two Things
The
March
SP 500 futures opened Thursday’s session
with a small upside gap, after new jobless claims took a surprising
higher-than-expected tumble. After a slight pause to fill the gap, good broker
buying came into the market with First Chicago alone a buyer of over 800
contracts. The noon release of the Philly Fed number, showing the highest level
in almost 3 years, was a non-event as the contract continued to consolidate
along R2 support. New buyers came in after the lunchtime lull to push the
contract up through R3 resistance. The afternoon TICK kept the shorts pinned
against the wall, pulling back only to the +600-400 area, before finally giving
some breathing room with profit-taking in the last 30 minutes. But the bulls
weren’t done as another thrust into the close put the futures at the best levels
of the day.
The March SP 500 futures closed
Thursday’s session with a gain of +12.25 points, and finished in the upper 1/2
of its range. Volume in the ES was estimated at 586,000 contracts, which was
ahead of Wednesday’s pace and below the daily average. Looking at the daily
chart, the contract gave some range expansion after its NR7 day, hitting the
upper end of its daily trading channel and the 127% Fib extension of the
“post-Saddam slide” to close at another new multi-month high .
On an intraday basis, the
60-min, 30-min, and 13-min charts all formed cups with Monday’s high that broke
to the upside late in the session. For the “harmonic pattern” players, all 3
charts have also formed a bearish Butterfly pattern that gives a first target in
the 1,077 area. The VIX hit a 7-year low and has become extended away from MA
resistance, but also take into consideration that the reading will be skewed
with options expiration this week.
Friday gives us no economic reports and should be
pretty quiet with quadruple-witching. After three up days and a trend day, I’ll
be looking for an oscillation day and some consolidation of the recent gains.
Please feel free to email me with any questions
you might have and have a great trading day on Wednesday!