Wednesday, December 15, 2010

Emini Futures Trading / SP Emini Finishes Lower


from the trading desk of CFRN...

One day wonder? After a 6 day run, the SP EMINI finished the day lower.  Resurfacing concerns in Europe and a drop in treasury prices put the clamps down on the indices. The SP Emini started the day in the hole with last nights Moody’s report that it might put Spain’s rating under review. That news sent the dollar higher against all the major currencies. The dollar strength put a cap on gold, copper, silver and other industrial metals which indirectly weighed on that sector. Fears of inflation sent the Bonds and Notes prices to new lows which put some stress on financial stocks.  Combined the market couldn’t recover its losses and finished the day in the red. Does this mean this is the top? In my opinion, no.  Could we experience a pullback?  In my opinion, yes. The market is long overdue for a correction and corrections are healthy if the market is going to continue to go higher.  This drop might create some short interest that the bulls can feed on later. 
Technically speaking
3 Weekly Trading Zones were covered today, the 1239/1240 level down to the 1230/1231 level.  
S&P 500 Emini Futures / ESH1
We still view dips as a buying opportunity and with todays close will look closely at the 1225/1224 as a level of support for tomorrow; this is the old tops on a weekly chart and another Weekly Trading Zone. If reports out of Europe get worse then it’s possible the SP EMINI will travel down to the 1216/1215 area. The common denominator here, we're still viewing drops in the market as potential buying opportunities.  Watch your CFRN Indicators for set ups at these important strike points.  Countertrend traders can try to sell into strength against the 1237 area but you’re going to have to defend the double top or the 1242 level

Stay Alert Stay Alive
B. Schlichter 

Market Profile Numbers for 12/16/10
VAH -  1237.00
POC - 1234.00
VAL -  1231.00

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