Here’s how we look (bottom chart) in the S&P 500 e-mini (ES) contract going into the 7:30 AM CT jobless claim numbers. Note the resistance between 912 and 914, as we continue in a short-term downtrend mode. If the 7:30 AM number cannot move us above that resistance level, I’ll be looking for a test of Wednesday’s lows below 900. Note that we’ll have a few opportunities to move this morning, with Treasury Secretary Geithner talking at 8:30 AM CT and Leading Economic Indicators and Philadelphia Fed reports at 9 AM CT.

I find it worth tracking interest rates and the dollar in response to these releases and events and correlating those moves to stocks to pick up on emerging and continuing intermarket themes. In general, if the numbers cannot move us out of a value range that was established up to that point, I assume that the trend that has been in place will remain intact. Once again, I’ll be tracking all of this intraday via Twitter (follow the tweets here).

8:15 AM CT – Update: We traded higher on the jobless claim numbers, but have stayed firmly within the overnight range. Note in the middle Market Delta chart that we’re now trading above the day’s volume-weighted average price (VWAP; red line), as the dollar has weakened versus the euro and 10-year rates have bumped higher. I’ll be watching to see how we trade around VWAP to handicap the odds of taking out Wednesday’s lows in early morning trade vs stay within the overnight range trade.

10:24 AM CT – I’ve added a fresh Market Delta chart (top) to show how we’ve been accepting value above the VWAP (red line) and around the 914/915 ES resistance. This raises the odds that, rather than trap bulls, we’ll flush out bears by taking the market above that resistance. I’m watching TICK and intermarket themes (weak dollar, strong 10-year rates) to see if that scenario unfolds.
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