Tuesday, July 07, 2009
Pre-Opening Briefing: Watching Ranges and Intermarket Correlations
Above you can see how a multi-day range is setting up in the S&P 500 e-mini (ES) futures, with resistance around the 897.50 level and support at yesterday's lows around 882.50. Note that the lower end of the range is also near the lower end of a much larger range defined by June's price highs and lows. With new 20-day lows expanding (see recent Twitter post), I would expect to see a test of these lows if we cannot break and stay above that 897.50 area. I would also be a buyer of those lows if we cannot further expand 20-day lows and see weaker downside momentum on any test. Meanwhile, keep an eye on the U.S. dollar and on commodity prices; those have been moving pretty reliably with stocks and have, at times, provided some useful tells regarding intermarket sentiment (stronger dollar and weaker commodities accompanying weaker stocks and vice versa).