Nov. 3, 2006 - AvidTrader.com covers a wide variety of futures markets each session, throughout the day. Scroll down for today's free look and for a free two-week trial.
S&P E-mini signals, setups and targets
Coverage for Nov. 3
No small debt to buyers.The ratio between Thursday's NYSE up and down volume was larger than the ratio between advancing and declining shares. Not very surprising, since S&Ps spent the entire session in negative territory. But it is interesting that the ratio was inverted up to an hour before the close, while S&Ps were firming. The relevance is muted somewhat by the session's slower volume pace, but volume was still relatively heavy. Wednesday's internals weren't very distributive on a bigger S&P loss while volume was heavy. Friday's market may not be very obligated to reward Thursday's sellers for their relative productivity, and Wednesday's buyers have yet to be rewarded for theirs.
Nudge, nudge, nudge.Thursday was the fifth-consecutive session to trade intraday under the prior session's low. Thursday's lows thoroughly tested natural support at the S&Ps two-week old prior lows, retesting the reaction to Dow 12,000 for the first time. Here's a new one: The past four noon hours - typically a playground for weaker players - each have trended down. None of which suggests that a move to new highs is about to begin, let alone whether this downleg has bottomed. But these factors do stand ready to add credibility to any rally attempt that recovers a prior high.
Gotcha!?S&Ps printed lower lows intraday in a multi-session decline, and closed above the prior session's low. Had Thursday's close been in positive territory, a "Gotcha!" setup would have clearly triggered. Since Thursday's session developed exclusively in negative territory, ending above the prior session's low is still somewhat of a success. It's not enough to position ahead of the opening gap up that would have been expected otherwise, but the recovery from another intraday dip to lower lows would be that much more likely to continue sharply higher.
Friday’s trading planOvernight price action isn't likely to be very volatile ahead of Friday's Employment Situation report. If Thursday's did end this downleg, then half of the session's gain could be achieved before the cash session's open. But a break under Thursday afternoon's low that isn't recovered within five minutes would suggest the downleg hasn't ended, and possibly that it has barely begun. Thursday's narrow range in negative territory adds an extra degree of difficulty, making it possible for initial trending to be false and reversed more substantially in the opposite direction. So while initial trending would get a benefit of the doubt, it would also get a tight stop.
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