Yesterday

The S&P500 mini futures (ESH5) made a new high again yesterday (Wednesday Feb. 25) the 11th time since the beginning of February that the market has made a new record. This time it couldn’t hold the gain. The futures reached 2117.75 at one point, a price that has never been seen in the ES before, but closed at 2110.25, 3.50 points below the previous close.

It was another very narrow range day (10.50 points total). The volume was slightly higher than yesterday, but still well below average. The ESH5 is now up only three points for the week, which suggests a little topping as we approach the end of the month. However, February has been a giant, up about 144 points so far.

The big news in the markets yesterday was in the NASDAQ, where every fundie’s favourite stock, AAPL, managed to lose about $21 billion in market cap in five minutes of trading. The total decline was about 2.5% — scarcely a crash, but enough to make some traders start looking around for the exit. The market gain sparked by the Fed Chair’s testimony to Congress has now been extinguished.

The ESH5 gave us one nice short trade mid-day when the price halted what had been a steady march upward, just below our resistance level at 2118.50 and dropped 10 points in a little more than an hour, before catching the wind from the usual afternoon volume-free levitation. Once again the only substantial volume was traded in the last five minutes before the close.

Today

For Thursday Feb. 26, we expect to see more profit-taking if the price pops back up around yesterday’s high or a bit higher into the 2018 resistance zone.

There is also long-term resistance at 2125.50-2033.25, which should hold ES down today and tomorrow. We may also see some rebalancing as we approach the end of February, and we will continue to focus on the short side until late afternoon.

  • Major Resistance: 2118.75-23.50 and 2128.25-29.50 should be regarded as resistance levels, and we are likely to see sellers around those levels.
  • Major Support: 2100-2097 and 2090.50-88.50 will be key support levels. We should see some buyers waiting there.

ESH5 Intra-day on Feb. 25, 2015. 5-minute bars

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