Yesterday

On Thursday the S&P500 min-futures (ESH5) made one of those moves that just scream manipulation. The large cap index was working its way lower toward the 2100 support level, coinciding with a decline in oil that saw crude down to $47 a barrel for time, and the dollar dramatically higher, with the Euro trading at 112 U.S. cents,

And then, at precisely 3:00 pm., it all turned around. Everywhere. AAPL, the Russell 2000 small cap index, the NASDAQ, the Dow and the ESH5 all tuned on a dime simultaneously and marched relentlessly higher into the close. There are railroads that can’t achieve that level of precision.

By the end of the day, the ES closed one tick below yesterday’s close (and Thursday’s open) to form a long-legged doji that looks like at least a pause in the February rally. The volume was well below average, and, as usual, the volume spiked dramatically between 4:10 and 4:15.

Today

Friday is the last trading day of the month, and, as usual, the managers will be trying to maintain the highs for the end-of-month reports. The monthly reports are secure, given the monster rally in February, but yesterday’s trading looks a lot like a concerted effort to make sure nothing important dipped into the red for the week.

This morning we have the release of the latest GDP numbers, and some evil-minded skeptics are suggesting that yesterday’s last-hour panic buying indicates the numbers were prematurely leaked. There is no direct evidence to support that notion.

Today we see 2117-2119.50 as a significant resistance area. Failure to move above that resistance could move the ES back down toward 2105-06.

If the psychological support at 2100 fails – the price was close to that level at yesterday’s low – it could drop further to 2095-97. If it does, we will be buyers at that price. The ES will try very hard to close above 2100 for the month.

Short-term, the indicators are bullish, but overbought. For the medium and long term, we are still bulls until the market tells us otherwise.

  • Major support levels: 2100-2097.50, 2092-88.50, 2065-68.50, 2056.50-54
  • Major resistance levels:  2118.50-19.50, 2123.50-21.75, 2128.50-29.50

 ESH5 Daily chart: Feb. 26, 2015

 dampier.2.27.15.png

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