9 Sep
Pre-open eMini S&P 500 Morning Report for September 9 2010
Posted in Pre-open Analysis by Bob English at 9:17:11 5 CommentsThe Precise Take – Equity futures rally overnight
Big Picture Analysis: We were expecting another shakeout of weak longs prior to resumption of the rally yesterday, however, the ES rallied over 1100 and has reclaimed last week’s highs. The risk markets look favorable to equities overnight, and the 1119.25 target is in sight. The cash S&P 500 and SPY should gap above trendline resistance drawn from the April 26 and August 9, 2010 highs. A close over it should generate additional upside follow through. While not the most likely scenario, we would still be on alert for the possibility of a shakeout of weak longs if the overnight strength is reversed early. Specifically, day-session-only R1 at 1104.00 (near yesterday’s high) should act as support, and a close below 1098 would be viewed as a significant failure. We’ll be watching the Australian vs US Dollar cross as it approaches the 0.932 to 0.940 resistance band that held in 2009 and so far in 2010. A strong downward reaction could warn of trouble for equities, while a strong move through would be supportive.
Trading Today: The upper end of the projected range contains day-session-only R3, from 1114.00 to 1114.75. The lower end contains day-session-only R1 and yesterday’s high, from 1103.00 to 1104.00. There are no major scheduled news items for the week, so the markets could be particularly sensitive to unscheduled announcements, particularly those out of Europe.
ahmedm
on September 9 2010 at 12:10:22
China has announced CPI to be released on Saturday as opposed to Monday – they have announced negative news over the weekend in the past in an attempt to minimize market effect. CPI number could come higher than expected raising the fear of more tightening.
Bob English
on September 9 2010 at 12:38:23
Thanks. Any dates you can thin of? June 21 high was on Yuan devaluation.
Jeff
on September 9 2010 at 12:55:49
Does the lower range have a lower likelihood of holding as support now that we are in the afternoon?
Bob English
on September 9 2010 at 13:26:49
That’s a discretionary question I would take on a day by day basis taking into consideration the short term price trend, overbought/oversold, price relative to major support/resistance and any remaining news items. The bearish clue this morning was that day-session-only R2 broke in the first 30 min and subsequently acted as resistance. Still possible to get a professional shakeout–maybe incorporating the China news. 1086-88 would be the target.
ahmedm
on September 9 2010 at 13:54:28
I see TLT dropped sharply after 1 PM