Sunday, October 28, 2007

Daily Numbers for Monday, October 29, 2007

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ES Resistance @1548-1552, 1558-1561, 1574-1578
ES support @1527-1531, 1516-1520

POC=1531.25 (2-day uptrend)
Weekly Pivot @1426.25

It's interesting to note that the big drop from 2 Fridays ago closed two gaps - one from Oct 4/07, and the other from Sept 25/07.

Based upon the October 26 market close, the 30-Day Federal Funds futures contract for the November 2007 expiration is currently pricing in a 100 percent probability that the FOMC will decrease the target rate by at least 25 basis points from 4-3/4 percent to 4-1/2 percent at the FOMC meeting on October 31.

Markets are actually trending up in the overnight session (so far), and is close to resistance. If it breaks above resistance (@1550-ish) in the overnight session, then I think would set a bullish tone for tomorrow. I also think the chances are good that we will gap up to open the session tomorrow.
In the bullish scenario, the gap does not fill, so I will watch closely for a long play near the reversal of the pullback.

In the less bullish scenario, the gap does fill (and possibly drops even more), so I will look for a long play near support.
Basically, so long as ES can stay above 1520, then the current uptrend will be intact and buying the dips should be the more profitable strategy.

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