Long awaited pullback in stock index futures
Stock Index Report
by Carley Garner
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2010-02-23
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February 23rd, 2010
Check out Carley's recent radio interview with Vince Rowe discussing her new book "A Trader's First Book on Commodities"and curent market issues:
Segment 1 http://toinvestsmart.com/2010/021910/021910_1.mp3
Segment 2 http://toinvestsmart.com/2010/021910/021910_2.mp3
Long awaited pullback in stock index futures
The light volume rally seemed to be suspect, and investors were looking for a reason to sell. This morning they got what they were looking for with a much weaker than expected consumer confidence index. The accumulating sell stops greased the pullback to leave the March S&P trading nearly 23 handles off of its overnight high.
According to the Conference Board, its consumer confidence index dropped to 46 in February vs. a 56.5 reading in January. If consumers act as poorly as they feel, retailers could suffer. The news overshadowed optimistic earnings reports from the likes of Home Depot, Sears, Macy's and Target.
If you were following overnight trade in the S&P, you were likely taken back by the sharp mid-night reversal. This occurred on a headline across the pond stating that the Bank of England describes England's recovery as "fragile". Also, German's business confidence index dropped for the first time in 10 months.
After seeing the overnight rally reverse (just short of our resistance numbers), it appears as though the selling could continue in the intermediate term. Our first support in the March S&P futures will be near 1088/1085 area, but a close below this could lead to a slide to 1052ish. That said, markets rarely go straight up or down so traders should be prepared for some rather large bounces on the way down. We see resistance near 1103 and then again just over 1115.
If you are trading the Russell, we had been looking for a possible pullback to 607 but the market faces strong support near 619 and we will need to see a close below this price to keep the bears in control.
The NASDAQ faces support near 1780, but a close below this could lead to a slide to the 1718 area.
* Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data. However, market analysis and commentary does. Charts provided by Track 'n Trade, Gecko software.
**Seasonality is already be factored into current prices, any references to such does not indicate future market action.
Please note: A mini S&P chart
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| Meet the Author |
Carley Garner
Senior Analyst and Broker; Stocks and Commodities Magazine columnist; Author of "A Trader's First Book on Commodities" and “Commodity Options” published by FT Press a division of Prentice Hall.
Stock Index Report has contributed 291 issues.
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