Monday, June 22, 2009

Pre-Opening Briefing: Weakness to Start the Week

With the S&P 500 Index e-mini futures market (ES) unable to hold above the 915 level stressed last week, we're now seeing selling toward last week's lows,
continuing the market's trend shift. We also continue to see intermarket themes dominate: the strong U.S. dollar versus the euro and weak commodities accompanying stock selling. Meanwhile, the Market Delta chart (bottom) shows that we're building volume overnight in the 908-909 level, with the volume-weighted average price higher at 911.50. Inability to rally above those levels will target last week's lows below 900.

7:56 AM CT - Just a few added notes to the briefing. We have a Fed meeting tomorrow and the announcement on Wednesday, so things could get a bit range bound in anticipation. Not much expectation of a rate change, but some language skewed toward economic growth and possible inflation could impact interest rates and the dollar. Meanwhile, we see considerable weakness in gold and oil, amid U.S. dollar strength and lower 10-year Treasury rates. I'll be tweeting from a prop firm today and will update market ideas that crop up through the morning.

9:28 AM CT - I added the top chart for longer-term perspective; we've broken last week's lows and now we're looking to see if we can accept value lower vs. move back into last week's range. To this point, NYSE TICK is quite weak; we would need to see more significant buying to sustain a move back into last week's range.


Matt Fahmie said...

Volume is stronger at the bid than at the offer in pre-market trading. Traders are rejecting previously accepted value and are in search of a buy response at a lower price. Monitor the high volume cluster 909-907.75 at the open. If we cannot trade and accept value above this area, I'm looking for price to trade lower. Possible short entries at a pullback into this area if tested on relative weak volume and weak trade facilitation at the offer.

arthatek said...

Q: what percentage of days does SPY / ES go below S2 ?

Q: of those, what percentage rise from the dead back above say S1 ?

(today I'm trading this under the assumption its a trend day down. just curious about historical stats)

pivots show on my screen automatically. pivots are of course based on the previous day's range. maybe we should work with pivots based on 14-day Average True Range ? but of course pivots are like the lines on the basketball court: all the players know where they are.

and something to remind oneself: anything can happen. know what the probabilities are and trade those, and relax.

I'm actually trading TWM and SDS, 2x inverse, so we are above the R2 since shortly after the open

thanks !