What September May Hold
The September S&P 500
futures (SPU and ESU) methodically finished higher in the last
official week of summer trading. Tech shares outperformed for the 3rd week in a
row, mostly supported again by the ballooning Semiconductor sector. The S&P 500
and the Dow posted their 6th month higher in a row, while the NASDAQ Composite
and Nasdaq-100 made it 7 in a row. This is something we didn’t even see during
the “bubble day” of the late 90’s.
The September S&P 500 futures closed Friday’s
session with a gain of +6.50 points and finished +15.25 points for the week.
Volume in the September ES was estimated at 370,000 contracts, which was behind
Thursday’s pace and below the daily average. On a daily basis, the contract
continues to form a diverging handle on a cup-and-handle pattern (see chart),
however, nothing has changed in terms of resistance in the 1,015 area. As I was
writing this, the ES was staging a little Labor Day party on Globex, and was
sitting just under that level. The 1-min 3-Line Break chart closed with a long
bias and a break price of 1,005.50. Not to beat a dead horse (or a dead VIX for
that matter), but the VIX became a teenager again and settled just above the
8/18 low.
Looking ahead this week, the “first string”
should be back from vacation and we should see an increase in trading volume.
The economic calendar is full, starting with Tuesday’s ISM Index and it’s
consensus of 53.5, and comes to a head with Friday’s highly anticipated August
Unemployment report. On a trivial note, the Stock Trader’s Almanac is bullish
the first part of September, before the month turns into the worst on average
for the S&P 500. However, keep in mind that it also pointed out that the last
week of August was negative the past 6 years. In other words, don’t blindly
follow the so-called “seasonal patterns.” If the current buying is able to
break the top of the trading range, we may see it snowball due to
“performance-driven” fund buying by those who don’t want to miss the boat again.
Daily Pivots for 9-2-03
| Symbol | Pivot | R1 | R2 | R3 | S1 | S2 | S3 |
| COMP | 1806.41 | 1817.99 | 1825.40 | 1836.98 | 1799.00 | 1787.42 | 1780.01 |
| INDU | 9395.71 | 9441.34 | 9466.87 | 9512.50 | 9370.18 | 9324.55 | 9299.02 |
| NDX | 1338.00 | 1348.08 | 1354.81 | 1364.89 | 1331.27 | 1321.19 | 1314.46 |
| SPX | 1005.47 | 1011.41 | 1014.80 | 1020.74 | 1002.08 | 996.14 | 992.75 |
| ESU | 1005.42 | 1011.83 | 1015.67 | 1022.08 | 1001.58 | 995.17 | 991.33 |
| SPU | 1005.27 | 1011.53 | 1015.27 | 1021.53 | 1001.53 | 995.27 | 991.53 |
| NDU | 1338.33 | 1348.67 | 1356.33 | 1366.67 | 1330.67 | 1320.33 | 1312.67 |
| NQU | 1337.83 | 1349.17 | 1357.33 | 1368.67 | 1329.67 | 1318.33 | 1310.17 |
| BKX | 870.18 | 875.89 | 878.98 | 884.69 | 867.09 | 861.38 | 858.29 |
| SOX | 454.46 | 459.23 | 462.25 | 467.02 | 451.44 | 446.67 | 443.65 |
| DIA | 94.18 | 94.68 | 94.94 | 95.44 | 93.92 | 93.42 | 93.16 |
| QQQ | 33.28 | 33.57 | 33.76 | 34.05 | 33.09 | 32.80 | 32.61 |
| SPY | 101.13 | 101.79 | 102.13 | 102.79 | 100.79 | 100.13 | 99.79 |
| SMH | 37.22 | 37.73 | 38.08 | 38.59 | 36.87 | 36.36 | 36.01 |
Fair Value & Program Levels
Fair Value — (0.40)
Buy Premium — 0.52
Sell Discount — (1.72)
Closing Premium – (0.23)
Please feel free to email me with any questions
you might have, and good luck with your trading on Tuesday!
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