Pre-open eMini SP 500 Morning Report 2.17.10

This is a guest post from Precision Capital Management

The Precise Take – Equity futures to gap up again into critical resistance

Leaders Analysis:  The leaders made large moves yesterday in favor of equities, and some have now reached potential inflection points.  The US Dollar Index sold off to just above long term pivot, fib and moving average support, the EuroYen rallied to moving average resistance, and gold to nearly the 50% retracement of the down move from the early December high.  While there is a bit for the Dollar and gold to continue their moves, which would facilitate some further gains in equities, the potential for a reversal soon makes the leaders equities neutral. 

Medium Term Analysis:  The ES was able to push to the 1094.00 high volume level on the close yesterday and has pushed through to the upper end of its value area (dark green below).  Below, we added a volume at price histogram (orange) to track the down leg and subsequent rally, and it shows that the ES has nearly cleared all the major volume resistance.  Though there are other forms of resistance (50 day moving average, fib and pivot levels), the major one, volume, is nearly off the table.  A close over 1100 would suggest a run up to test the early January range of 1127 to 1148 is a good possibility.

Trading Today:  The lower end of the projected range contains the overnight low, the daily gap area and yesterday’s high, from 1092.50 to 1094.00.  The upper end is day-session-only R2 at 1103.50.  Chance of a gap fill, or at least half gap fill, within…

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