Watch This Hanging Man
The December S&P 500
futures (SPZ and ESZ) opened Thursday’s session with a +6.00 point
gap to the upside after Q3 GDP was reported to be the strongest in 19 years,
along with the lowest Weekly Jobless Claims in a month. The contract’s
inability to get through the October daily high resistance in the pre-market and
the open just under R2 attracted the broker vultures, and the ensuing “gap and
trap” open didn’t stop until it found S1 support at 1,042.25 and printed the
session low.
The contract clawed its way back to the unchanged
mark and 2 attempts to get back through R1 resistance at 1,049.50 failed. The
contract consolidated again around its Daily Pivot before a 3rd attempt at R1
ran out of time. It was deja vu all over again compared to Wednesday as,
overall, the market acted like it’s just biding time until the year-end close
for most mutual funds on Friday.
The December S&P 500 futures closed Thursday’s
session with a gain of +2.25 points, and closed in the upper 1/2 of its daily
range. Volume in the ES was estimated at 744,000 contracts, which was ahead of
Thursday’s pace and above the daily average. On a daily basis, the contract
posted a hanging man just off the Oct. high, with a confluence of support still
at its 10-day and 20-day MAs (see chart), and just avoided reversing long on the
daily 3-Line Break.
On an intraday basis, the 60-min Gartley pattern
was negated but should continue to be watched for a Butterfly to develop. The
13-min chart skirted along the small trend line formed on Wednesday and was able
to close back above MA support.
Friday morning gives us a few economic reports
starting at 8:30 am ET with Personal Income and Spending, and their consensus of
0.2% and (0.1%) respectively. After the open, we have the Revised Michigan
Consumer Sentiment at 9:45, with its consensus of 89.5, followed at 10 am by
the Chicago PMI, and its consensus of 55.4.
Have a happy and safe Halloween. Please feel free
to email me with any questions you might have, and have a great trading day on
Friday!
Chris Curran
chrisc@tradingmarkets.com