Yesterday
Well that was quick. Less than three days after the triumphant announcement of a deal to resolve the Greek debt crisis, Greece failed to meet the first deadline. Yesterday (Monday) Athens was supposed to present a list of “reforms” it will undertake in return for more Eurozone funding of its $350 billion debt.
It failed to make the deadline and is now promising the list will be presented today (Tuesday Feb. 24). In fact, what probably happened is that Greece presented a list that was unacceptable to the creditors, and was sent back for a do-over.
The US markets are obviously tired of this farce. Yesterday the market could only barely get out of its own way. The mini-futures on the large-cap index (ESH5) traded in negative territory in a very limited range for most of the day, on light volume.
The futures only managed to close at a respectable 2106.75 (one tick below yesterday’s close) thanks to the usual last hour ramp up, which took the price from the low of the day to the high of the day in about an hour. There was more volume in the last 15 minutes than in the preceding three hours.
This end-of-day ramp is unnatural, but not unpredictable. It is profitable to go long around 3 p.m. on down days most of the time. Elsewhere, a former member of the US government’s “Plunge Protection Team” admitted in a television interview that the government intervenes directly in the market on occasion. This might have been news once, but everybody who watches the market regularly has known it for years.
Today
The big noise today – absent another Black Swan from Europe – will be the appearance by the Chair of the Federal Reserve before the Senate (today) and the House (tomorrow) for her semi-annual explanation of WTF the Fed is doing.
Transcripts of her prepared remarks will be available early, but it is the unscripted answers to questions that may make news. Any unexpected comment could move the price in either direction, but this is not her first rodeo and Ms. Yellen is unlikely to break any new ground.
Once again the algos will try to pounce on any hint about the timing of an interest rate increase.
Based on yesterday’s trading range, a break above 2110.50 could push price up to 2116.25-15.50 or higher. Conversely, if the ES moves below 2096.50 the price could drop back down 2092-91 zone or lower.
The futures may stay inside yesterday’s narrow range until Yellen’s testimony is completed. However we will be watching for a range breakout move today or tomorrow and trading in the direction of the breakout.
- Major support levels: 2082-84.50,2065-68.50, 2056.50-54, 2035-38.5
- Major resistance levels: 2111.25-12.50, 2118.50-19.50, 2123.50-25.25
ESH5, Feb. 23, 2015. Intra-day chart, 5-minute bars
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