S&P 500 Emini Futures Day Trading THE GAP
S&P Emini 500 Futures had another convincing distribution day on Friday. Volume was more than double the average at 3.54 million contracts, and the range was very deep to the downside. All signs that the rally from March 2009 may be in for a correction. After three high volume down days in a row, however, look for a bounce in the short term. A spike to the 1115 level over the next couple of days, with a break below 1085 may be a signal that the correction is for real. Friday’s action filled two open gaps that had been underneath the market price levels for awhile. The open gap from the Monday December 21 close of 1108.75, and the open gap from the Friday December 18 close of 1098.25, both filled on Friday. High volume tests to the downside have occurred twice in the rally, once in summer of last year and once again in the fall. Both times the test has been overcome to the upside. Action on the moving averages for this downside test seem to indicate a more serious challenge to the downside.