Watch For This Pattern On The Open

The December S&P 500
futures (SPZ and ESZ)
opened Tuesday’s session with a -1.75 point gap
to the downside, despite upbeat earnings reports from JNJ, MER, and BAC.
Weakness late in the pre-market spawned some good broker selling off the open,
taking the contract down for an early test of Monday’s low and S1 support at
1,040. The next 3 hours became a game of ping pong between 1,040 and the
1,0442-43 area as neither the buyers or the sellers could achieve the upper
hand. A late lunchtime move to fill the gap pushed the futures up to a higher
game of ping pong between 1,045 and 1,047. A last hour push gave the best
levels of the day before the contract settled just under Monday’s high at 1,048.

The December S&P 500 futures closed Monday’s
session with a +3.00 point gain, and finished in the top 1/2 of its daily
range. Volume in the ES was estimated at 567,000 contracts, which was ahead of
Tuesday’s pace, but still below the daily average. On a daily basis, the
contract continues to move up into a rising wedge pattern. On an intraday
basis, the 60-min chart continues to form a cup and handle off of uptrend line
support, while the 13-min chart began to reverse off of a pretty sloppy bearish
Butterfly (see chart).



On Tuesday morning at 8:30 am ET, we have the
September Retail Sales report. Consensus is for a (0.1%) decrease, due to lower
auto sales, and a 0.4% increase when excluding auto sales. Also at 8:30 is the
Empire State Index and its consensus of 16.0. Barring any surprises, we should
have a gap up to deal with due to the response to Intel’s earnings and guidance
report. With the weak closing PREM, be alert for “gap and traps” off the open.

Daily Pivots for 10-15-03

Symbol Pivot R1 R2 R3 S1 S2 S3
COMP 1936.45 1950.07 1956.96 1970.58 1929.56 1915.94 1909.05
INDU 9786.09 9839.87 9866.76 9920.54 9759.20 9705.42 9678.53
NDX 1416.02 1425.64 1430.63 1440.25 1411.03 1401.41 1396.42
SPX 1046.60 1052.37 1055.25 1061.02 1043.72 1037.95 1035.07
ESZ 1045.33 1051.67 1055.83 1062.17 1041.17 1034.83 1030.67
SPZ 1045.33 1051.67 1055.73 1062.07 1041.27 1034.93 1030.87
NDZ 1418.67 1430.33 1436.67 1448.33 1412.33 1400.67 1394.33
NQZ 1418.83 1430.17 1436.33 1447.67 1412.67 1401.33 1395.17
BKX 938.47 944.07 946.88 952.48 935.66 930.06 927.25
SOX 470.17 477.85 481.77 489.45 466.25 458.57 454.65
DIA 98.09 98.64 98.92 99.47 97.81 97.26 96.98
QQQ 35.22 35.48 35.63 35.89 35.07 34.81 34.66
SPY 105.02 105.68 106.09 106.75 104.61 103.95 103.54
SMH 38.61 39.22 39.56 40.17 38.27 37.66 37.32

Fair Value & Program Levels

Fair Value — (1.48)

Buy Premium — (0.68)

Sell Discount — (2.25)

Closing Premium – (1.88)

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

Chris
Curran