This Could Make The Market Vulnerable
The September S&P
futures (SPU and ESU) opened Tuesday’s session with a -4.75 point gap
to the downside, despite Durable Orders coming in as expected. Locals tried to
close the gap off the open, but were stopped several times at the Daily Pivot
just under 992 and the contract settled into a range ahead of the 10:00 Consumer
Confidence number. On the surface, it looked like the report had beat the
consensus of 79.6, and the knee-jerk up was enough for the futures to close the
opening gap.Â
But, a little digging found that the majority of
the gain was based on consumer “expectations” and not on current conditions.Â
The reaction sent the PREM to -2.70 vs. the cash SPX, triggering several large
sell programs as the futures took an elevator drop through Monday’s low at 987
and finally finding some footing in the 983 area. The lunchtime lull came early
as the contract settled into a 2-point range just off the session lows, but a
bout of short-covering just after 2:00 pm snowballed on itself and attracted
some broker buying that magnified the effect even further.
The September S&P 500 futures closed Tuesday’s
session with a gain of +1.75 points, and finished in the top 1/3 of its daily
range. Volume in the September ES was estimated at 640,000 contracts, which was
well ahead of Monday’s pace and actually above the daily average. On a daily
basis, the contract posted a bullish engulfing line and key reversal up after
earlier spiking down through its 20-day MA & 50-day MA support, but needs
follow-through on Wednesday to confirm it. On an intraday basis, the 60-min bear
flag broke at the open but retraced back up to now test the 50% of the 3-day
drop (see chart). The daily Banking Index
(
$BKX.X |
Quote |
Chart |
News |
PowerRating)
chart shows the index holding the neckline of the head-and-shoulders pattern
we’ve been watching.
src=”https://tradingmarkets.com/media/2003/Curran/cc082703-01.gif” width=”322″ height=”403″ />
Wednesday’s economic calendar is empty which
could make the market vulnerable to the recent “bevy” of rumors and order-entry
errors.
src=”https://tradingmarkets.com/media/2003/Curran/cc082703-02.gif” width=”481″ height=”424″ />
Please feel free to email me with any questions
you might have, and good luck with your trading on Wednesday!
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