Here’s Where Today’s Focus Will Be…

October 3, 2003
Chris Curran

The
December S&P 500 futures (SPZ and ESZ) opened Thursday’s session
with a -1.75 point gap to the downside, after the Weekly Jobless Claims report
offered no positive surprises. Merrill Lynch and Goldman Sachs were good sellers
off the open, but once they backed off, the futures offered the best play of
the session as they were able to close the gap and force a small short squeeze
on the break above Wednesday’s high of 1,017. The contract spent most of the
rest of the session chopping back and forth around the flat line, before a late
push after the equities market closed pushed it to a new high for the session.

The
December S&P 500 futures closed Thursday’s session with
a gain of +3.00 points, and finished in the top 1/3 of its daily range. Volume
in the ES was estimated at 727,000 contracts, which was behind Wednesday’s pace,
but still above the daily average. Open interest decreased again on Wednesday’s
up move, continuing the recent pattern of rising open interest on the down days
and declining open interest on the up days.On
a daily basis, the contract was able to close back above its 20-day MA at 1,017
and is testing the 62% Fib retracement of the 9/19-30 down move.

On an intraday basis, the
13-min chart used its 15-period MA as a guide to break both triangle and cup
and handle patterns (see chart), while the 3-min chart closed with a cup and
handle. The 1-min 3-Line Break chart closed with a long bias and a break price
of 1,019.75.

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On Friday morning at 8:30
a.m. ET, all focus will be on the September Unemployment report, which is expected
to uptick to 6.2%. That is followed at 10 a.m. ET by the ISM Services report
and its consensus of 63.0.