S&P 500 Emini Day Trading Gap Friday December 4, 2009

S&P Emini 500 Futures gapped up 2.50 points at the opening bell, then surged up into a new high for the year, 1117.00.  Just prior to the scheduled 10:00 a.m. news release, the index fell back into congestion approximating yesterday’s supported price range.  The last 20 minutes of trading saw a break down through the day’s low on heavy volume.  The late high volume sell off and the failure to hold, once again, a pierce above the 1110-1111 level seems bearish.  The index is still holding above the short term moving averages, but a move on volume below the 1100 level could provide evidence of a break down.  Clues to possible correction levels may be found in the five open gaps underneath the current price levels.  A major sell off could take the index to the low 900 levels last seen in mid summer’s trading.  Conversely, a close and follow through above the recent highs, could signal a continuation of the current up trend.  The day’s action came on above average volume, 2.03 million contracts. The high to low range of 19 points today was just above the 14 day average true range of 18.2 points.  Significant economic news is scheduled for tomorrow, and the current news driven market could respond with volatility.