Keep An Eye On This Index

December 17, 2003
Chris Curran

The
March
SP 500 futures opened Tuesday’s session with
virtually no gap, after a mixed bag from the economic front with a
lower-than-expected November Consumer Price Index, but a 4-year growth rate high
for Industrial Production. An oscillation day was expected after Monday’s trend
day, which is what we got with the contract bouncing between Monday’s session
close and 10-day MA support in the 1,067 area, and the overnight Globex high at
1,070.50. The lunchtime lull finally gave way to a break of the range to new
highs as we continue to see a shift into larger-cap stocks from the tech sector.

The March SP 500 futures closed
Monday’s session with a gain of +6.00 points, and finished in the upper 1/2 of
its range. Volume in the ES was estimated at 509,000 contracts, behind Monday’s
pace and below the daily average. Looking at the daily chart, the contract
posted an inside day with a reversal off of its 10-day MA support at 1,067, and
closed right at its 50% Fib retracement of Monday’s slide. On an intraday basis,
the contract retraced 50% of Monday’s slide, as noted above, and settled just
under gap pullback resistance, however it was able to close above 60-min,
30-min, and 13-min support from 1,072 to 1,070.

Keep an eye on the
Banking Index
(
$BKX.X |
Quote |
Chart |
News |
PowerRating) here as it’s
turning back up after being oversold on support inside a triangle pattern, and
could provide fuel to lead the SP futures higher.

Wednesday gives us no economic reports, so I’ll
expect an early game of tug-of-war, with the first move down off of a gap up.
Pick your time frame for your trading and make sure you know what’s going on
within that time frame.