15th August 2014
The chart above is an hourly chart of the emini S&P contract from Wednesday July 30 (1965 close) to Friday August 8 (1923.75 close).
In the chart I have drawn 2 lines : (1) the bounce from 1910.25 (Friday) to 1937.5 (Monday) and (2) this Friday’s intraday bounce from 1890.25 to 1928.25.
It is a case of lower lows and lower highs. And the bounces are sharp and fast …
No major events are scheduled for Monday
The emini settled at 1962.5, or 10.5 points higher since our last update. The historic (intraday) high remains at 1978.25, set on Thursday 3 July 2014 for the futures contract and 1984.22 for the spot index, set this past Monday July 7.
Below is the futures daily chart since the start of 2014.
For next week, Fed chair Yellen will be testifying before the Senate (Tuesday) and the House (Wednesday) on monertary policy in her semi-annual appearance. Next week will also bring many 2nd quarter results from corporates such as JP Morgan, Goldman Sachs, Bank of America, Google, General Electric, Intel and Johnson & Johnson.
The emini contract settled at 1952 points for the week. Since the last update on June 6, the emini has advanced by 2.75 points. During these past three weeks the low has been 1919 and the high at 1960. This past Wednesday the third estimate for the 1st quarter GDP came at -2.9 pct
For the following week the monthly jobs report will be released on Thursday instead of Friday, due to the July 4 holiday. Analysts expect +200,000 jobs to have been added in June. U.S unemployment is at 6.3 pct
Below is a daily chart of the emini S&P 500 contract since the start of 2014. The red line is the 3 month average closing price.
The emini settled at 1949.25, up 27.25 points for the week. Another record high. May’s payrolls confirmed that economic conditions are improving. Also, the CBOE volatility index closed at 10.81, its lowest level since February 2007. For next week there are no significant economic news and earnings. S&P futures are now up 5.88% for the year, 108.25 points higher from 2013’s close at 1841.
Hourly chart for the week 2 June to 6 June 2014
There is a calm before the storm - Old sailors’ adage
The emini advanced by 24.5 points this week to settle at 1921.5 Volume was scarce, ranging from 900K to 1,100K. The rise was steady throughout the week. Next Friday the U.S jobs report will be released. Expectations are for a 215,000 rise in May.
Hourly Chart from 26 May (Memorial Day) to 30 May 2014
A very important week came to an end with the S&P 500 spot index closing at 1900.53 points and the future emini at 1897, up 22.25 points. First two days of the week were choppy with the low coming on Tuesday at 1864.75. From there it was a steady advance up to Friday’s close. Given that Monday the market is closed due to Memorial day, momentum traders may be looking at a strong advance on Tuesday - Wednesday. From there, it is anyone’s guess.
Below is an hourly chart of the previous 5 days.
Pray for the best, plan for the worst and go about our everyday business
We had a new historic high for the S&P 500 index the past week at 1902.17 and for the emini at 1898.5 (Tuesday). I would not dare pick the top as I adhere to the adage “in technical analysis we are hunting for trends, never shooting for a top nor fishing for a bottom”.
From a long term perspective the S&P 500 has made two historic highs near the 1530 price level, once in early 2000 and again in 2007 before the meltdown of 2008-2009. We are now on uncharted territory, and anything goes. Should the market head higher, look for the emini to advance from Friday’s settlement at 1874.75 to the recent high at 1898.5 on Monday. Look for a continuation on Tuesday above 1900 (stop loss orders, heading for 1902, 1908? Who knows). And then on Wednesday the FOMC minutes will be released. Will we see a big move next week that will “make” the bears or will it “break” them? Or will next week be choppy, with the real move to be decided on May 26 to 30?
Below is an hourly chart (23 hours to the day) of last week’s price activity.
The emini S&P500 futures settled for the week at 1873.5 (-1 point from May 2). Below is a 5 minute line chart from Monday through Friday. The low was Wednesday’s 1854.5 and the high was Thursday’s 1884.75 (30.25 point range).