S&P 500 Emini Day Trading Gap Tuesday October 27, 2009

S&P Emini 500 Futures opened with a 1 point gap up, and looked as though they might head up for the day.  Those expectations were dashed when  resistance was encountered at the 1088 level, a level around which much of last week's trading revolved.  Prices pierced that level several times until about 11:00 a.m., then plunged 13 points over the next hour.  The rest of the trading day was spent in an 8 point deep range with the close falling at 1064.00, down 12.50 points.  Trading volume was above average at 2.34 million contracts, and the 17 point trading range was average.  Today marks only the 2nd time in the last 16 trading sessions that the close came below the prior day's low.  The close also falls on the 20 session moving average, which may prove to be support.  If prices close below the 1066 level on volume we may be seeing the start of  an anticipated correction in the index.  Our list of open gaps underneath the current prices may give a hint as to the extent of the correction.  The lowest open gap is from mid July at 902.00.  That level would approximate a 50% retracement from the March lows to the recent highs.  That's a reasonable retracement expectation.