Friday, April 09, 2010

Morning Briefing for April 9th: Near the Highs

8:56 AM CT - I've added the top Market Delta chart to show how we built volume between 1185 and 1187 in the ES futures, only to fail at resistance outlined below and return to the lower end of the overnight range. Sector performance is mixed; only 23 more declining stocks than advancers. So far, this is looking like a range market; if so, we should oscillate around that VWAP line around 1185. I'm watching how we trade around that volume bulge area at 1185-1187 to handicap the odds of sustaining new bull highs today.

Amidst strength in Asia and Europe and firm crude and metals prices, we broke above yesterday's highs in the ES futures (above) and are now at the top of a multi-day trading range. How we trade near these highs will set the day's trading agenda: failure to sustain buying pressure would target a move back to the overnight lows and the middle of the multiday range. Sustaining the break above yesterday's range would target fresh bull highs. Although we are trading near those highs now, only about 900 stocks registered fresh 20-day highs on Thursday. That has me watching for possible divergences should we trade higher today. More later this AM.