Tuesday, January 19, 2010

Morning Briefing for January 19th: Watching the Trading Range

8:18 AM CT - I've added the Market Delta chart (at top) to show how we broke support in the 1127 area, only to find eager buyers pushing stocks back into the trading range and back toward the day's VWAP (red line). I will be watching closely how we trade relative to VWAP, as that should provide some indication as to whether we can hold the premarket lows and eventually test those premarket highs. I'll also be watching Aussie dollar vs. USD, as that has nicely tracked some of the intermarket themes referenced below.

A key question for this morning's trading is whether we hold the support in the 1127/1128 area or begin a fresh downleg in the ES futures (above).

One thing I'll be watching and commenting upon this morning is whether intermarket themes from Friday's trading (USD strong; commodities weak; lower Treasury rates) begin to enter today's trade. If not, I'll look for us to test the overnight highs in early trading; failure to take out those highs would target a test of those range lows.