Here’s What To Expect After The Close

The December S&P 500
futures (SPZ and ESZ) opened Tuesday’s session
with no gap in the
absence of any real market-moving news. After chopping around Monday’s session
low at 1,051.50 in the first 30 minutes, some slow buying came in to lift the
contract through its Daily Pivot at 1,055.50 but failed at resistance on a
30-min bear flag (see chart).

The contract methodically sold off to test the
lower end of its range and to print a new session low, but support came in again
off of S1 just above 1,050. That 30-min resistance proved to be too much again
and put a cap on the upside as the contract reversed for a test of the session
low before settling just above Monday’s session low.


The December S&P 500 futures closed Tuesday’s
session with a loss of -2.25, and finished in the lower half of its daily range.
Volume in the ES was estimated at 554,000 contracts, which was behind Monday’s
pace and below the daily average. Open interest declined slightly on Monday’s
move, indicating more longs taking money off the table on the contract’s
inability to make new ground. On a daily basis, the contract posted a doji and
continues to set up with sell-side divergence above converged 10-day MA and
20-day MA support at 1,042. On an intraday basis, the 30-min chart was the star
of the day as noted above. The daily Banking Index (BKX) posted a market
structure high and continues to set up with sell-side divergence.

On Wednesday, we have the ISM Services report at
10:00 am, along with Factory Orders. Estimates are 63.4 and a 0.6% increase,
respectively. Wednesday also marks the release of the new Matrix movie and Wall
Street’s own smoke and mirrors version will play out after the closing bell in
the form of Cisco Systems’ (CSCO) earnings report, and the anticipation of John
“The One” Chambers to save all of tech sector mankind, or at least give out that
“warm fuzzy feeling.”


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

Chris Curran

chrisc@tradingmarkets.com