Pre-open eMini SP 500 Morning Report 2.16.10

This is a guest post from Precision Capital Management

The Precise Take – Equities to gap up on opex week

Leaders Analysis:  The leaders are mostly quiet overnight, with gold the notable exception and looking strong.  The US Dollar Index continues to trade just under strong resistance at 80.55, and has been unable to close above as of yet.  All in all, the leaders are slightly equities bullish.

Medium Term Analysis:  The abbreviated week will end with CPI and options expiration.  In the meantime, there is only a minor housing report today at 1:00 pm.  Tomorrow features five minor reports, including the weather-delayed Treasury Budget and FOMC Minutes.  At least one is likely to get the markets moving at some point. The ES traded up to 1086.50 overnight and looks like it will gap open at or just above the critical 1080-1083 resistance band we have been following.  The ES has retraced nearly all of the latest downward slide that began February 4.  Significantly, a lot of volume was traded at the lower value area between about 1059 to 1071 (high volume level = 1065.75), and it has a better chance of holding as support than the areas created in late January (and subsequently gave way easily).  The highest volume level for the March contract still looms overhead at 1094.00, so it will be important to watch how price reacts there and below at 1065.75.  It will likely take strong news to break through either of their respective value areas.

Trading Today:  There are a number of strong support areas that could have marked the lower end of the projected range today. We settled on…

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