S&P 500 Emini Day Trading Gap Tuesday July 28, 2009

S&P Emini 500 Futures opened at 975.50, a 2 tick gap down that filled within the first minutes of trading.  At 10 a.m., prices vaulted out of  a short period of congestion and reached the high of the day, 979.75.  The price spurt coincided with the release of the New Home Sales figures at 10 o’clock.  Over the next hour, sellers stepped in and drove the Emini futures to the day’s low of 969.00.  The move erased the gains following the housing report, and then some.  It also encompassed today’s entire 10.75 point below average trading range.  The rest of the day saw trading remain within an ascending channel that took back most of the morning’s initial price action.  The close of 979.25 was at the high end of the day’s range.  The close once again, provides a new yearly high on decreased volume.  Today’s 1.5 million contracts traded is the 2nd day in a row of declining volume.  Yesterday’s volume was 1.68 million contracts, and both day’s are below the 1.87 million contract 50 day average.  New highs on declining volume are generally considered a bearish caveat.