Wednesday, November 18, 2009

Midday Briefing for November 18th: Staying in a Range

Here's a follow-up to the chart shown in this morning's briefing. You can see that we traded back toward yesterday's low in the ES futures, bounced significantly higher back into Tuesday's range, and now have consolidated near the day's VWAP (red line) around 1106.25. So far, Wednesday has been trading inside Monday's range, as did Tuesday. As of my most recent count, 18 stocks in my basket have traded up from the open, 22 down. Financial issues have been relatively strong; we've seen relative weakness among raw materials shares, tech stocks, and small caps. We can also see mixed sentiment in the balance of volume trading at offer vs. bid (bottom histogram) and in the NYSE TICK.

The ES 1110 level represents important resistance; 1100 represents near-term support. I am watching intraday sentiment and leading sectors (large caps) for indications regarding the eventual break out of this trading range.