S&P 500 Emini Day Trading Gap Monday November 2, 2009

S&P Emini 500 Futures ended October trading much the same way it started, with a high volume sell off.  Prices gapped down 2.50 points at the open, 1059.00.  The gap filled in the first 15 minutes of trading, then the sell off began in earnest.  The index plunged 30 points before settling into a ragged sideways consolidation over the last 2.5 hours of trading.  The close of 1031.50 came at the low end of the day’s 32.5 point trading range.  Volume on the day was heavy at 3.4 million contracts, well above the average of 2.0 million.  Over 150,000 contracts traded in the last 5 minutes of the trading day.  The action filled the underneath open gap from October 28th of 1039.75.  This sell off brings the index back within the down trend line of the last 7 trading days, and has erased all of October’s gains.  The markets have turned bearish since the media trumpeted a 10,000 point Dow Industrial Average a couple of weeks ago.  One contrarian school of thought dictates when the markets make the front page, it’s time to take the opposite view.  Maybe so, but for now the charts show we are in a down trend.  Until that changes, we’ll look for lower prices.