Yesterday
The S&P500 mini futures (ESH5) had a modest bounce Monday (Mar. 9) to recover some of the losses booked on Friday. The market made an inside day and closed at 2077.75, without generating much excitement and without showing either a strong recovery from Friday’s dump or a continuation of the decline.
It was the sixth anniversary of the low recorded in 2009, and the market has essentially been in one long bull market since then, but nobody was lighting any candles. It was as if the predators were sitting in the sunshine, dozing, while they digested the meal they made of the bulls last week.
The biggest news in the market was the hoopla surrounding the release of the Apple watch, which drew lots of fawning media attention, but few happy cheers from the market. AAPL lost $17 billion in market cap when the share price declined after the product was introduced. It recovered somewhat before the close.
Somebody must have noticed that 53% of AAPL’s revenue comes from one product, and the next Big Hope is also essentially a fashion item. What happens when fashions change?
Today
Monday’s bounce in the futures was not enough to reclaim the previous support around 2088-89, which is discouraging for the Bulls. Today that area is a key decision point – a move above it will give traders the impression the market will move back up over 2100-2105, and from there perhaps resume its upward march.
Remaining below 2088-89 reinforces the negative outlook and raises the possibility of a further decline to the 2062.50 region. A break lower than that doesn’t find support until it reaches the uptrend for the intermediate-term trend, the blue line of the chart.
The March futures contract is preparing to rollover toward the end of this week (when traders will start to focus on the June contract) and next week is Triple Witching when futures and option contracts expire together. We may see the formation of a lower low on quiet trading this week.
- Major support levels: 2065-68.50, 2056.50-54, 2046-43.75, 2035.50-36.50
- Major resistance levels: 2088.75-89.50, 2098.50-99.50, 2104-07
ESH5 Daily Chart, Mar. 9, 2015
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