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.