The case of the squeeze – S&P 500 futures update

1 hour ES_F 

Today’s action is indicative of the much hated/loved short squeeze. Prior to today’s move we had a declining market which for weeks saw the largest company in the world leading the selling of 2-3 percent without any material news beyond broken technicals and herd mentality.

We penned a post a few weeks about asking the question, “does apple lead the market, or does the market lead apple” well today we can safely say apple is up 6.7 percent or 36 points which has pulled the NDX up 2 percent. The slope of today’s rise is probably not sustainable though tomorrow we might see some consolidation and a continued move higher, just not with the same umph.

Also noteworthy today is the noticeable lack of volume on this move, which leads me to believe this is some fundamental value buying coupled with timid shorts covering. (Today’s volume is highlighted with the red square)

When looking at the S&P 500 futures 30 min chart (below) you can see the pink line is acting as resistance at 1382, over this level could mean a quick move into 1390 and if 1382 is converted to support we could see the ES sitting at the 1400 level come thanksgiving.

30 min ES_F .. note the resistance @ pink line. also notice how we squeezed over the red line this morning and subsequently raced higher.

This is what happens

 

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