Monday, December 18, 2006


Here is an hourly chart of the March S&P e-mini futures. These are trading about 12 points over the cash index. I last commented on this market here.

Notice the green bar showing the opening hour of pit trading today. It was wider than any bar Friday and the market closed in the upper half of the bar. Normally such activity indicates buying by longer time frame traders and selling by short time frame traders. But today there was no follow through to the longer time frame buying activity and this tells me that the sellers were longer time frame traders as well.

I interpret this to mean that the market will have to break a little bit more to find more bids from longer time frame traders. I estimate that this support will be found in the 1432-34 range today and tomorrow. In any case I still think the next signficant development will be a rally to 1455.


Anonymous said...

Hi, Carl

I think that buying in the S&P 500 futures may represent hedging of a large short position in the underlying!

I think that you should forecast relative to the underlying index, because the premium changes daily. You might mention the current day's premium.

Thanks for blogging.

Anonymous said...

Hi carl,

If we get get a close below the 475 level in GOOG, would if be safe to assume the aggressive selling from today would continue.


Anonymous said...

since es has gotten to 1432 doesnt that give an M structure which is bearish?