Here’s What I’ll Be Looking For On Thursday
Stock
index futures opened Wednesday’s session unchanged in heated anticipation
of Fed Chair Greenspan’s Monetary Policy speech before a House committee. The
contract chopped around until 11 am ET, when the highlights of the speech came
across the newswires. While nothing really different was said, the market liked
the headline that the Fed would be “patient” with the economy’s growth and saw
no urgency to raise rates. That reassurance was enough to bring new buyers into
the market and send the shorts running for cover. The futures backed and filled
around R2 resistance for the next 2 hours and then resumed the morning run
through the January highs.
The March SP 500 futures closed
Wednesday’s session with a gain of +12.00 points, and finished in the upper 1/2
of its daily range. Volume in the ES was estimated at a heavy 735,000 contracts,
which was ahead of Tuesday’s pace, and above the daily average. Looking at the
daily chart, the contract managed to just close above the January high at 1,155
to post a new contract high with some nice range expansion. So much for the
bearish Gartley as the contract forms a cup, but we’ll continue to monitor it to
see if it shapes up into a Butterfly pattern. The first reversal area would be
1,164, which corresponds with the SPX’s 50% retracement of the entire bear
market. The Daily 3-Line Break chart also reversed long on the close above the
January high. On an intraday basis, the 60-min, 30-min, and 13-min time trend
lines all broke apart as resistance and then lent a hand as support as price
traded sideways waiting for MA support to catch up.
Thursday morning gives us a
couple of reports at 8:30 am ET. The January Retail Sales report is expected to
be unchanged from December, but up 0.5% ex-auto. Estimates for Weekly Jobless
Claims are for a slight decrease to 345,000. After the close, we have tech
earnings from DELL and NVDA. I’ll be looking to fade any opening gap to the
upside and for an oscillation-range morning.
Please feel free to email me with any questions
you might have and have a great trading day tomorrow!