Wednesday, November 18, 2009

Morning Briefing For November 18th: Trading Higher

8:19 AM CT - I added the top chart to show how the ES futures are trading after the morning numbers. We initially sold off, then bounced back toward the day's session VWAP around 1107.50. Going back to yesterday afternoon, the 1104/1105 level has contained market selling. We're also seeing intermarket themes--weak dollar, strong commodities--supporting equity prices. As long as we stay above that 1104/5 area, we should make a move at testing bull highs. A move below 1100 would reverse yesterday's and Monday's firmness and suggest larger toppiness in the market.

This Market Delta chart, with each bar representing 125,000 ES contracts traded, shows how we're setting up going into the housing and CPI numbers this morning. Note how we held the 1100 area yesterday (which represented Monday's breakout level), and now we're trading above yesterday's range, building value higher. I'll update this with another chart and detailed commentary prior to the market open.