Here’s What I Expect Friday

  • September 17, 2004
  • Chris Curran

Stock
index futures opened Thursday with small upside gaps and continued
higher for the first 90 minutes, buoyed by lower crude prices and a tame CPI
that eased some of the nervousness ahead of next week’s FOMC meeting.  The
futures drifted sideways/lower ahead of the noon Philly Fed, and attracted some
good broker selling on the weaker-than-expected number.  A sideways chop through
the afternoon gave way to a test of the session’s low, and position-squaring the
last hour gave a mid-range close.

The
December SP 500 futures closed out Tuesday’s session with a gain of +3.75
points, while the Dow futures added +30 points.  Looking at the daily chart, the
ES posted another inside day and is resting on its “lines in the sand” made up
of its 10-day MA and uptrend line from the August low. On an intraday basis, the
contract’s upside was capped by broken 60-min and 30-min uptrend line
resistance. The YM also posted an inside day after testing and retracing back
off of its 200-day MA. In the small-caps, the ER2 showed good relative strength
with a bullish engulfing line and market structure low, but was stopped at the
week’s high.

               

December
bonds got a boost from the tame CPI data, and closed at a 5+ month high. The
Semiconductor Index (SOX) posted another inside day with a doji as it sits on
its 20-day MA support.  The Banking Index (BKX) continues to hold both weekly
and daily bearish Gartley patterns, but found support for the 5th day in a row
at its 10-day MA. 

Friday
morning is quarterly expiration of futures and options, so I’m expecting a
pretty flat day and an early exit from my trading desk!  The only economic
report scheduled is the Preliminary Michigan Consumer Sentiment Index at 9:45,
which is expected to post a slight increase to 96.7.  The slow movement off of
daily and weekly resistance would be indicative of distribution, but I would
imagine that we’ll have to wait until next week after the FOMC meeting for any
bigger swings down.

 

 

Program Trading Levels

Fair Value – 0.35   

Buy Program Premium – 1.38

Sell Program Discount – (0.71)

Closing Premium – 1.10

Closing Bias – If the futures gap down at the
open, watch for a retracement up towards the gap fill.

Please feel free to email me with any questions
you might have, and have a great trading week!

Chris
Curran

 

 

 

Â