Friday, December 15, 2006
Here is an hourly chart of the March S&P e-mini futures. The futures are trading about 12 points above cash right now. I last commented on this market here.
After the CPI number came out this morning the market rallied to 1445.00 in electronic trading but during pit trading has only made it as high as 1444.25.
A rally to resistance on news followed by a couple of hours of sideways action is usually a sign of longer time frame trader selling at resistance. In this instance I don't see much aggressive selling since the hourly ranges remain narrow. So I think we shall see a mild reaction down into the 1437-39 range followed by a renewed rally to 1455 or so.
One of the most remarkable (and unusual) features of this advance is the narrow hourly ranges that have become the norm. Narrow ranges do not indicate any aggressive longer term time frame selling. So the implication is that, normal reactions aside, this market is headed even higher.
The 1511 target for the cash S&P which is projected by my box theory is looking more and more plausible