S&P 500 Emini Day Trading Gap Wednesday October 28, 2009

S&P Emini 500 Futures gapped up 1.50 points this morning, but the upward move was short lived.  The gap filled in the first 15 minutes of trading, and sideways movement within a range took over for the rest of the day.  The day’s range of  12.50 point trading range was less than the average of 16.79 points, and the average closed towards the bottom of the range at 1059.75.  Daily Volume was average at 2.46 million contracts.  Do you know why daily volume is relevant to trading the next day?  Today is the third down day in a row, and has broken below the 20 day ma Moving Average.  A downtrend seems to be developing, but it’s too early to tell if a serious correction is in the offing.  If the Friday close is underneath the prior week’s low, and daily trading falls below the 1048 level, the signal for a correction may be present.  Last week, the media were touting a 10,000+ level in the Dow Industrial Average.  That’s a danger signal.  Of course, as day traders we don’t care about direction, we only care about movement.  We let the price action tell us what’s happening in the market, and we don’t forecast what might happen.