*** Liquidity switches from March (H) to the June (M) contract on the 11th ***

We’ll be on hiatus, so today is the last note until the 15th.

The March e-mini NDX (NQ) traded in a tight range of 84 bps yesterday, with no test of Tuesday’s high or low and it closed down 0.50 points at 1852.  Yesterday’s equity session started strong and NQ reached its 1861.25 high within the first 90 minutes.  Over the next half hour, NQ retested the high twice before it rolled over.  The decline paused near the morning low (1851.50) before NQ sold off again and tested the 1848 level (1845.75 low).  The rally off the low found resistance at 1853, the bottom of the 1853 to 1894 range from 12/24 to 1/20 mentioned yesterday.  We also noticed that 1856 has provided resistance over the past 2 days, it is a Fibonacci extension based on the trading between 2/5 and 2/25.  Overnight trading took NQ below yesterday’s low (1844.25), with it back in positive territory at the moment.  Support @ 1848, 1841.75, 1825, 1813.75, 1804, 1788.75 and 1774.50.  Resistance @ 1864, 1871.75, 1886.75 and 1902.75.

Chart Source: TradeStation

*** Liquidity switches from March (H) to the June (M) contract on the 11th ***

We’ll be on hiatus, so today is the last note until the 15th.

The March E-Mini S&P (ES) closed 1118.50 yesterday, up 1 point to extend its win streak to 4 days.  There was no test of the 50% Fibonacci retracement (1126.25 vs. 1125 high), but the 1119.25 level provided resistance.  At the start of yesterday’s equity session, 1119.25 provided support as ES was on its way to the 1125 high about 90 minutes later.  From the high, NQ trended lower and about 3 hours later it retested 1119.25.  The break of the level took ES to the 1115.50 equity session low (1115 low on the day) before it rallied back to test 1119.25 over the final hour.  Volume was up a little, but it remains very weak.  Following up on yesterday’s comment about how it’s difficult to be bullish here, we take a look at the S&P Depository Receipts (SPY) instead of ES because some candlestick formations don’t apply in 24 hour markets.  Notice the long upper shadows in SPY over the past 2 days – early rallies are being sold off into the close – not a bullish sign.  Overnight trading took ES below yesterday’s low down to 1114, with it back near unchanged ahead of Jobless Claims.  Post claims, ES is back testing the 1119.25 level.  Support @ 1119.25, 1108, 1103, 1096.25, 1084.50, 1069.50 and 1061.  Resistance @ 1126.25, 1131.75, 1148.25, 1153, 1168.25 and 1184.

Chart Source: TradeStation

In our original post from 2/22, BKX was approaching the top of a symmetrical triangle formation (definition).  It closed above the top of triangle that day, but not above our 48.3 threshold.  Since then, BKX has oscillated around the top of the triangle.  The threshold is now a close above 48.15 and a breakout still projects near 58.  Chart Source: TradeStation

*** Liquidity switches from March (H) to the June (M) contract on the 11th ***

The March e-mini NDX (NQ) rallied up to 1862.25 yesterday - no test of the 1864 level – but it faded over the final 2 hours to close 1852.25, up 52 bps.  NQ began yesterday’s equity session above the 1848 level and traded sideways with a slight upward bias into the 1862.25 high 4 1/2 hours later.  From the high, NQ moved lower and 2 hours later it tested the 1848 level (1846.50 low, 1842.50 low on the day).  1848 held and NQ ticked up a bit into the close.  Yesterday’s reversal off the high could have been caused by the supply that NQ ran into from the 12/24 to 1/20 range – about 1853 to 1894.  Something we also noticed is the continued absence of volume that we also highlighted on the chart.  As long as there is no close above 1864, we see no need for further upside projections.  Overnight trading tested the 1848 level (1847.75 low), with NQ back in positive territory here.  Support @ 1848, 1841.75, 1825, 1813.75, 1804, 1788.75 and 1774.50.  Resistance @ 1864, 1871.75, 1886.75 and 1902.75.

Chart Source: TradeStation

*** Liquidity switches from March (H) to the June (M) contract on the 11th ***

The March E-Mini S&P (ES) added 3 points yesterday, as it followed through on Monday’s gain and closed 1117.50, 1 tick below the midpoint of yesterday’s narrow 1112.75 – 1122.75 range.  ES oscillated around the 1119.25 level for all of yesterday’s equity session and traded within an even narrower range of 1115.25 – 1122.75.  Volume continued to decline yesterday and the volume picture makes it difficult to be bullish here.  The decline into early February was on increasing volume and the rally over the past month has been on declining volume.  Is this a “climbing a wall of worry” kind of thing?  There was no test of the 50% Fibonacci retracement (1126.25) of the range from the October 2007 (using the December 2007 contract – 1586.75 high) to the March 2009 (March 2009 contract – 665.75 low).  A close above there and we would have to look for higher prices.  Overnight trading has been in a 4.5 point range with no test of the 1119.25 level.  Support @ 1119.25, 1108, 1103, 1096.25, 1084.50, 1069.50 and 1061.  Resistance @ 1126.25, 1131.75, 1148.25, 1153, 1168.25 and 1184.

Chart Source: TradeStation

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

* Factor - the number of ETF shares that are approximately equivalent in notional value to the notional value of one futures contract

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

The March e-mini NDX (NQ) managed to close 1842.75 yesterday, above the 62% Fibonacci (1825.1) and the 1841.75 level, albeit on low volume again – 257M contracts vs. 306M average.  The last day with volume more than a couple percent above average was on February 5th, which was 40% above average.  Volume on 2/23 was less than 1% above average and on 2/25 it was less than 10% above; otherwise 13 of last 15 days have seen below average volume.  There was no test of the 1825 level during yesterday’s equity session (1825.75 low, 1818.50 low on the day) and 90 minutes in, NQ reached the 1841.75 level.  For the 5 1/4 hours that followed, NQ traded sideways between 1840.75 and the 1848.50 high.  Yesterday, we thought a close above 1825 would take NQ between 1848 and 1864 and we’re already there.  Overnight trading took NQ up to 1854.50, with it still above the 1848 level at the moment.  Support @ 1848, 1841.75, 1825, 1813.75, 1804, 1788.75 and 1774.50.  Resistance @ 1864, 1871.75, 1886.75 and 1902.75 (new).

Chart Source: TradeStation

The March E-Mini S&P (ES) managed to close 1114.50 yesterday, the first close above the 1103 – 1108 congestion area since 1/21.  Volume was light again - 1.6MM contracts vs. 2MM average.  ES tested the 1108 level for the 1st 30 minutes of yesterday’s equity session (1106.75 low, 1103.50 low on the day) and then it trended higher for the next 2 hours up to 1114.75.  From there, ES traded sideways between 1111.50 and 1115.50 (the high) for over 4 hours.  With the close above the 1108 level, we no longer have buyer’s remorse on our short ES idea.  We looked back at the range from the October 2007 (using the December 2007 contract – 1586.75 high) to the March 2009 (March 2009 contract – 665.75 low) and ES is approaching the 50% retracement again – 1126.25.  ES was above the retracement from January 4th through the 20th before it moved down to 1040.75 on February 5th.  Not far from the retracement is a Fibonacci extension drawn from the 2/5 low – 1129.  Let’s see if ES has the legs to close above those levels.  That could cause bears to throw in the towel.  Overnight trading took ES to 1122.75, with it still above the 1119.25 level.  Support @ 1119.25, 1108, 1103, 1096.25, 1084.50, 1069.50 and 1061.  Resistance @ 1126.25 (new), 1131.75, 1148.25, 1153, 1168.25 and 1184 (new).

Chart Source: TradeStation

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

* Factor - the number of ETF shares that are approximately equivalent in notional value to the notional value of one futures contract

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

The March e-mini NDX (NQ) found resistance at its 50 day average on Friday (1821, 1821.4 today) and closed 1818.50, back above the 1813.75 level.  NQ found support at the 1804 level for the first 40 minutes of Friday’s equity session (1803.50 low) and then it moved past the 1813.75 level 10 minutes later.  Over the balance of the day – almost 6 hours – NQ stayed above 1813.75 for all but 1 minute.  NQ hit the 1822.25 high 3 separate times over a span of 5 1/2 hours and pulled back each time.  Overnight trading reached 1831.50, with ES now back near the 62% Fibonacci retracement (1825.1).  Is today the day NQ closes above the retracement?  If it can, look for a move up between the 1848 and 1864 levels.  Support @ 1813.75, 1804, 1788.75, 1774.50, 1762.25 and 1744.75.  Resistance @ 1825, 1841.75, 1848, 1864, 1871.75 and 1886.75.

Chart Source: TradeStation

The March E-Mini S&P (ES) found support at the 1096.25 level (the low) and resistance at its 50 day average (1104.9) and 62% Fibonacci retracement (1106.4) on Friday (1107.75 high) and closed 1103.50, inside the 1103 – 1108 congestion area for the 5th time in the past 7 sessions.  In a slightly longer span, 8 of the past 9 session have seen below average volume, only Thursday’s wild session was above average.  Friday was also the 2nd consecutive day that ES found support on the level, the low was 1084.50 on Thursday.  ES tested the 1103 level for the first 30 minutes of Friday’s equity session and then it dipped to the 1096.25 low 10 minutes later.  It took 15 minutes to get back to 1103 and then ES traded in a sideways range between 1099.50 and 1106.50 for almost 6 hours, over the final 2 hours the range shrunk to 4.25 points.  Over the weekend we had buyer’s remorse.  ES has not been able to close above our 1109.50 short sale stop and we are ready to get back in thinking that close will not come.  A close today below the 50 day average and we’ll short again on the overnight reopen with the stop on a close above 1109.50.  With the tight stop, we’ll look to start covering somewhere around 1069.50 to start.  Overnight trading had ES up to 1111.50, but its back near the 62% Fibonacci at the moment.  Support @ 1103, 1096.25, 1084.50, 1069.50, 1061, 1051.75 and 1036.  Resistance @ 1108, 1119.25, 1131.75, 1148.25, 1153 and 1168.25.

Chart Source: TradeStation

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

* Factor - the number of ETF shares that are approximately equivalent in notional value to the notional value of one futures contract

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

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For the 2nd time in 3 days, the March e-mini NDX (NQ) recovered from a sharp selloff.  Unlike Tuesday’s 88 bps bounce off the low that resulted in a 1.1% loss, NQ managed to rally 1.3% off the low and close down 3 bps (1813.50).  NQ moved below the 1788.75 level at the start of yesterday’s equity session and stayed below for over 4 hours (1780.50 low).  Once it moved above the level, it took only 20 minute to reach the 1804 level.  After an hour pause at 1804, NQ resumed its rally to the 1816 and over the final 30 minutes found resistance at the 1813.75 level.  Yesterday’s close took MACD back above 0, so that is no longer resistance.  That leaves the 50 day average (1820.8) and the 62% Fibonacci retracement (1825.1) of the 1/19 (1895.75) to 2/5 (1710.75) decline as resistance.  Overnight trading has NQ in a narrow 77 bps range, having already tested the 50 day average (1822.25 high) and it is now back below near the 1813.75 level.  Support @ 1804, 1788.75, 1774.50, 1762.25, 1744.75 and 1731.50.  Resistance @ 1813.75, 1825, 1841.75, 1848, 1864 and 1871.75.

Chart Source: TradeStation