S&P 500 Emini Day Trading Gap Friday October 16, 2009

S&P Emini 500 Futures opened Thursday with a 5.25 point gap down.  The open proved to be in the lower part of the day’s narrow 9.75 point range.  The 14 day average true range for the Emini Futures is 15 points.  The average has narrowed over the last three weeks from close to 18 points down to the current level.  The index traded most of the day under resistance at the 1088 level.  After three attempts to break through, prices finally broke out at 2:35.  The close of 1092.50 is a new high for the year, and it came on average volume of 1.84 million contracts.  The current price level puts the Emini firmly in overbought territory on the daily charts.  Tomorrow is options expiration Friday and market action prior to expiration  typically tends to be bullish.  If key earnings disappoint, a major correction could be in the offing.