Yesterday
Monday (Feb. 9,) we described how the S&P500 large-cap index (SPX) had formed a rectangle pattern, and we warned that false breakouts from these rectangles were common. A couple of hours later, the SPX pulled back inside the box, like a groundhog frightened by its shadow. Six more weeks of winter!
The futures (ESH5) dropped from Friday’s exuberant run up over the week, rallied to within two points of Fridays’ close in the morning session, but sold off in the afternoon and closed almost exactly at the open to form a Doji candle with a narrow range. Volume was about average.
Today
Today (Tuesday Feb. 10), the 2035-32 range will remain a key zone. As long as it holds up, ESH5 still has a chance to move back up to fill yesterday’s gap at 2053.
The current contraction move could lead ESH5 to have a breakout of yesterday’s range move. If a breakout occurs, we will be trading in the direction of the break out for the very short term.
- Major support levels: 2020-18.50, 2007-09.50, 1988-86, 1975-74;
- Major resistance levels: 2066.50-68.50, 2075.50-78.50, 2085-88.50
ESHD Intraday chart, Feb. 9, 2015
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