Where To Look For Support Today
The December S&P futures
(SPZ and ESZ) opened Monday’s session with a -9.00 gap just under S2
support at 1,025, after the US dollar took a large hit against the yen and the
euro. The size of the gap gave a good probability of at least a partial gap
fill, however, the high closing discount on the PREM from Friday also pointed at
a continuation day. Brokers were good sellers off the open with Merrill Lynch
and First Chicago each selling at least 1,000 contracts a piece and not being
very coy about it.
After three attempts at breaking back up through
S2 failed, locals who had bought the open were forced to liquidate. The selling
snowballed down to the 1,018 area, which is the contract’s 20-day MA and daily
trend line support. The futures spent the next 4 hours in a 2-3 point chop,
until the consolidation break at 1 pm ET attracted enough selling to break daily
support and print a new session low. Short-covering the last hour helped to
relieve some of the sting, but the opening gap still remained untouched.
The December S&P 500 futures closed Friday’s
session with a loss of -11.75 points, and finished in the middle 1/3 of its
daily range. Volume in the ES was estimated at 736,000, which was ahead of
Friday’s pace, and above the daily average. On a daily basis, the contract
cracked its 10-day MA and settled just above its 20-day MA and trend line
support. On an intraday basis, the contract broke a 13-min symmetrical triangle
to print the session low and may find some support on Tuesday with a 60-min
bullish “double” Gartley and Butterfly (see chart).
src=”https://tradingmarkets.com/media/2003/Curran/cc092303-01.gif” width=”320″ height=”458″ />
src=”https://tradingmarkets.com/media/2003/Curran/cc092303-02.gif” width=”518″ height=”456″ />
Please feel free to email me with any questions
you might have, and have a trading day on Tuesday!
Chris Curran