Wednesday, May 17, 2006


Here is a 15 minute bar chart showing regular hours trading in the June S&P e-mini futures. I last commented on the S&P's here.

In this morning's guesstimate I said that the decisive break of the 1290 level on the CPI news told me that the market was headed for 1274, not 1306 as I thought yesterday. After the open you can see the very high volume of trading and I think this confirms that the path of least resistance is now downward.

Once the market reaches 1274 I would expect a rally of about 15 points, about equal in length to the rally from Monday's overnight low to Tuesday's high. I still expect to see this market trade in the 1265-70 zone before an advance to 1350 can begin.

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