Why Traders Are Watching These Five Stocks

October 14, 2003
Chris Curran

The December S&P 500
futures (SPZ and ESZ) opened Monday’s session with a +2.25 point gap
to the upside after Motorola’s surprise early earnings release and ahead of what
was expected to be a light-volume session due to the Columbus Day holiday.

The contract did a classic fade off the open,
sitting under R1 resistance and allowing moving average support to come up and
create enough buying pressure for a run through R2 resistance at 1,046 and then
the high of the session at 1,048. The next 2-1/2 hours were spent in a choppy,
tight (understatement) range until a lunchtime drop officially filled the
opening gap. The futures managed a last hour move up off the lows, but the pace
was abysmal.

The December S&P 500 futures closed Monday’s
session with a +4.00 point gain, the best finish since June 2002, and finished
in the top 1/2 of its daily range. Volume in the ES was estimated at 307,000
contracts, which was well behind Friday’s pace, and below the daily average.

On a daily basis, the contract posted an evening
star and is moving up into a rising wedge pattern (see chart). On an intraday
basis, the 60-min chart closed with a cup forming a handle off of 1,040 support,
while the 13-min chart broke a bullish Gartley pattern.