Watch The Air Pocket At This Level
The September S&P 500
futures (SPU and ESU) finished respectably higher after a week
highlighted by the S&P 500 index’s breakout on Tuesday. Technology shares
helped pave the way higher, thanks to numerous sector upgrades, and were also
given a helping hand by financial shares.Â
Keep in mind, the index made its
initial high on June 17th, and traded in a textbook rectangular range between
960 and 1015 for 77 days, before finally being resolved to the upside.Â
Measuring the rectangle provides an upside target of 1060-1070. But, as we all
know, in the wonderful world of market-dom, things don’t always go perfectly as
planned. So, there could very well be many bumps in the road before a possible
continuation of the breakout takes place (see below). There also seemed to be
too much media hype given to the breakout, which could produce a less expected
outcome in the near-term. Nevertheless, the breakout should be respected, since
market players seem to be giving more credence to what the charts are saying,
instead of what the fundamental and macro-economic outlook may look like months
down the road. In other words, although the major indexes, as well as various
sector indexes, are in desperate need of a breather, the theme of momentum with
little regard to valuation will likely not die quietly without a fight.
The September S&P 500 futures closed Friday’s
session with a loss of -6.00 points, but finished up for the 7th week in a row
with a gain of +14.50 points. Volume in the ES was estimated at 661,000, which
was ahead of Thursday’s pace, and above average. On a daily basis, the futures
posted a market structure high and have reached the 1st reversal area on a
bearish Butterfly pattern (see chart), just like ones I’ll point out live in my
upcoming
seminar. There is an air pocket down to the contract’s 10-day MA at
1,010.50, with 20-day MA support in the 1,002 area. On an intraday basis, the
60-min trend line finally cracked and along with the 13-min chart, closed with a
bear flag.
                               
Looking ahead this week, we have the quarterly
S&P contract rollover on Thursday as December (ESZ and SPZ) becomes the active
month. The economic calendar is fairly quiet most of the week, but heats up on
Friday with the monthly Producer Price Index, Retail Sales, and the Preliminary
Michigan Consumer Sentiment Index.
Daily Pivots for 9-8-03
| Symbol | Pivot | Â Â Â Â Â R1 | R2 | R3 | S1 | S2 | S3 |
| COMP | 1862.84 | 1874.98 | 1891.85 | 1903.99 | 1845.97 | 1833.83 | 1816.96 |
| INDU | 9518.08 | 9574.78 | 9646.23 | 9702.93 | 9446.63 | 9389.93 | 9318.48 |
| NDX | 1365.65 | 1376.27 | 1390.87 | 1401.49 | 1351.05 | 1340.43 | 1325.83 |
| SPX | 1022.92 | 1027.66 | 1033.94 | 1038.68 | 1016.64 | 1011.90 | 1005.62 |
| ESU | 1023.25 | 1028.75 | 1035.25 | 1040.75 | 1016.75 | 1011.25 | 1004.75 |
| SPU | 1023.17 | 1028.63 | 1034.97 | 1040.43 | 1016.83 | 1011.37 | 1005.03 |
| NDU | 1367.17 | 1380.33 | 1394.67 | 1407.83 | 1352.83 | 1339.67 | 1325.33 |
| NQU | 1367.17 | 1380.33 | 1394.67 | 1407.83 | 1352.83 | 1339.67 | 1325.33 |
| BKX | 878.45 | 882.77 | 889.58 | 893.90 | 871.64 | 867.32 | 860.51 |
| SOX | 460.46 | 467.36 | 474.91 | 481.81 | 452.91 | 446.01 | 438.46 |
| DIA | 95.40 | 95.93 | 96.49 | 97.02 | 94.84 | 94.31 | 93.75 |
| QQQ | 33.98 | 34.30 | 34.65 | 34.97 | 33.63 | 33.31 | 32.96 |
| SPY | 102.93 | 103.45 | 104.08 | 104.60 | 102.30 | 101.78 | 101.15 |
| SMH | 37.83 | 38.48 | 39.15 | 39.80 | 37.16 | 36.51 | 35.84 |
Fair Value & Program Levels
Fair Value — (0.25)
Buy Premium — 1.22
Sell Discount — (1.10)
Closing Premium – 0.91
Please feel free to email me with any questions
you might have, and have a good trading day on Monday!
Chris Curran
P.S. Spend 3 days with me
trading the E-minis live!Â
Click here for details.