Thursday, March 18, 2010

Morning Briefing for March 18th: Consolidating Strength

9:35 AM CT - I've added the top chart to show how volume has built between 1161 and 1162, with no NYSE TICK readings at a significant level. That is consistent with a range trade. I'm watching to see if we can stay below that 1161 area on weakness, as we oscillate around VWAP.

Notice how volume has shut off this morning below the 1158 price in the ES futures (long arrow above). We can also see how selling pressure and volume dried up from the 3:30 AM CT bar to the 4:30 AM bar (short arrow above). Given yesterday's ability to rally off the 1156-1157 level, that's setting up a meaningful support area for this morning's trade. Yesterday's high at the 1165 level sets up as resistance, as we consolidate recent strength. I'll be watching to see how we trade relative to VWAP; it wouldn't surprise me to see range trade oscillate around that VWAP level as part of that consolidation of market strength.

Stay tuned; I'll update this morning perspective following the open.