What Wouldn’t Surprise Me Today

The December S&P futures
(SPZ and ESZ) opened the first front-month
trading session with a
very minor gap to the downside, after rallying back 4 points from the overnight
Globex low. A Jobless Claims report showing the 4-week average had crept back
above 400,000 contributed to the earlier weakness. First Chicago was a good
seller again for the second day in a row as the contract formed and broke a
textbook head-and-shoulders pattern on the 3-min chart. A morning rally in the
Banking Index (BKX) helped the futures reverse off the lows in the 1,011 area,
but it fizzled out after lunch and proved to be a drag the rest of the session.
The contract was able to hold its Daily Pivot after 3 tests and ended up
settling just above it. Despite the narrow high/low range, the market offered
some nice intraday follow-through again.

The September S&P 500 futures closed Thursday’s
session with a gain of +3.25 points, and just finished in the top 1/2 of its
daily range. Volume in the ES was estimated at 574,000, which was behind
Wednesday’s pace, but still above the daily average. On a daily basis, the
contract posted an inside day with a close right at the upper boundary of this
summer’s trading range, and remains below its 10-day MA at 1,018. On an intraday
basis, both the 13-min and 60-min bullish Butterflies charts panned out, but ran
out of steam short of their 1,021 target and closed with bear flags. The
Banking Index (BKX) warrants a look here as it consolidates in a triangle just
above its 100-day MA at 857 (see chart). A break of these levels could pressure
the SPoos in the near-term.

image src=”https://tradingmarkets.com/media/2003/Curran/cc091203-01.gif” width=”371″ height=”502″ />

image src=”https://tradingmarkets.com/media/2003/Curran/cc091203-02.gif” width=”495″ height=”425″ />

On Friday morning, we have a full economic report
menu starting with the Producer Price Index and Retail Sales at 8:30 am ET. The
consensus on each is 0.3% and 1.5% respectively. Those are followed at 9:45 am
ET by the Preliminary Michigan Consumer Sentiment Index and its consensus of

I wouldn’t be surprised to see volume drop off
dramatically after the first few hours as the market prepares itself for a busy
week next week, highlighted by the FOMC meeting and Quadruple-Witching

If you’d like to join me and an exclusive group
of traders in a very personal and unique three days of E-mini trading next week,


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


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