S&P 500 Emini Day Trading Gap Tuesday November 3, 2009

S&P Emini 500 Futures opened November trading with a 4.75 point gap up.  The gap filled 15 minutes later.  The index looked like it may be in a bullish mood as it sprang up to a daily high of  1049.50 in the first hour of trading.  After a sideways consolidation, the market lost support during the lunch period and dropped nearly 15 points to the day’s low of 1026.00.  A rally attempt at 1:00 p.m. retraced part of the drop, but a retest of the low of 1026.00 provided a double bottom.  Prices rebounded to close at 1038.50 for the close.  The daily chart is still showing a market in retreat as prices remained within the  seven day down trend.  Volume came in above average at 2.8 million contracts.  The index may see a short term bounce as it first enters a short term oversold indication.  The true test of direction will be the weekly close.  If the close Friday comes beneath the prior week’s low, the index may be in for a more sustained correction.  The first hint of the weekly action will be in the next two days.  A follow through below Friday’s low on volume will be bearish.