Your MUST-READ Morning Stock Futures Cheat Sheet: Bulls hanging on short term

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The Precise Take – Bulls hanging on short term

Big Picture Analysis:  Yesterday, it looked like it might be a sell-the-news event off the slightly better than expected ISM report, but bulls held ~1140 in the ES and rallied into the close.  In the below 135 minute chart, we can see this was also trend channel support and, at this point, we would not be surprised to see continuation up to the low ~1200’s, where bulls will need to compensate for the longs that were trapped around the turn of the month attempting to get out at break even.  Fulfillment of the upper end of the trend channel currently comes in at the low ~1240’s.  Despite our now short term bullish leanings, to reverse our intermediate term bearishness, we would need to see breadth, liquidity and leadership improve.  With respect to the latter, we did see the potential beginnings of a turnaround yesterday.  However, the prevalence of headline risk could easily facilitate a sharp reversal, as we have seen many times over this summer.   A big speech by the POTUS tonight, along with one by Bernanke tomorrow and the continued wrangling over the ESFS are all potential catalysts.

Trading Today:   Below are marked the support and resistance areas.  Today’s Beige Book will be scrutinized, as it contains the economic information the FOMC will use to justify its policy stance.

Today’s  Scheduled News (all times EDT)

Major Market Movers
Fed Beige Book at 2:00 pm

Minor Market Movers
None

Tomorrow’s Scheduled News

Major Market Movers
Jobless Claims at 8:30 am
Bernanke Speaks at 1:00 pm

Minor Market Movers
Int’l Trade at 8:30 am
EIA Petroleum Stats at 10:30 am


Click above images for larger charts.