Stock Market Futures Find Footing: Overhead Resistance Looms

The Morning Report: Charts Still Vulnerable; Breach of 1931 Needed

Earnings season begins – Jagged overnight price action for stock market futures has kept traders off balance. Sellers have control of the charts below if they can keep S&P 500 futures below 1931.

Although charts have begun a cycle of higher lows and higher highs on short time frames for several stock market futures, the bigger picture is still in bearish control and needs more constructive price action. We will trade what’s in front of us, but I will be watching to see what happens when we test 1995 in the coming days.

Intraday resistance for S&P 500 futures sits near 1931.50. Intraday support sits at 1901. Breaks of either resistance must be broken and retested on tighter time frames (30min/1hr) for reversal trending trades on the day to hold. Sellers hold control of the chart – bounces should be sold near resistance (interim resistance sits at 1914.5 – that was the level to watch as the day progressed yesterday). We have bearish momentum formations, but they are lifting as we try to recapture support near this very important level near 1931.

Shorter time frame momentum indicators are negative, and higher than Monday. Longer cycles for stock market futures are downward trending and hold steady in negative territory.

See today’s economic calendar with a rundown of releases.

RANGE OF TUESDAY’S MOTION

Crude Oil  Futures (CL_F)

Crude Oil continued its failure to hold lows on the overnight motion on Monday and this morning is bouncing after making yet another lower low overnight. These are textbook bearish formations. But even as we see crude oil prices lower, we notice that technical divergence continues. The trades based on market structure are the same – making resistance tests and failure still the most likely occurrences today. Range based trading has worked well here with the benefit of doubt going to the sellers each time. Trading ranges are between 30.60 and 32.26, with 31.55 being an important support level to recapture and hold.

Moving averages in crude oil are still clearly negative on longer time frames. Momentum is securely negative but contracting and looking divergent. This divergence is bringing buyers trying to pick bottoms –however, these opportunities last only for very short cycles as the sellers continue to force the collapse of support. If we are at an inflection point in the grand scheme, they are often quite difficult to trade so use caution. Intraday trade setup suggests a long off 31 retest (counter trend big picture but holding from an inflection perspective) into 31.4, 31.6, 31.8, and 32.24– see the blog for levels above that region. Below a 30.86 failed retest or a rejection of the 31.7 area sends us to 31.47, 31,23, 30.96, 30.65, 30.4, and 29.8 perhaps as the next support space – Momentum on longer time frames is negative but lifting.

E-mini S&P 500 Futures  (ES_F)  

Below is a chart with active S&P 500 futures price support and resistance trading levels. Click to enlarge.

The chart is trying to bounce but resistance levels remain selling zones: particularly near the 1931 level. That is a big battleground for today.

The setups look the same as yesterday as the chart is congested. Upside motion has the best setup on the breach of and positive retest of 1930.5 – or a bounce off 1914.5 (as long as momentum shows this as likely to hold – this would be attempting to pick the bottom so close attention to the chart is required). S&P 500 futures targets from 1914.5 -1919.5, 1922.5, 1927.75, 1929.5, and 1931.75 seem likely if the bounce holds – but again, all bounces should run into resistance. Watch 1936.5- 1943 for sellers to try to reverse the trend of the bounce, if the chart continues north over 1931.75. Long trades are counter trending at this writing but the chart could be inflecting from an intraday perspective -pullbacks into higher lows may reverse the intraday trend.

Downside motion opens below the failed retest of 1912.5 or at the failure to hold 1930.75 bounce. Retracement into lower levels from 1930.5 gives us the targets at 1929.25, 1927.75, 1922.5, 1919.5, 1914.5 and perhaps 1910.75. Breaks there send us back to overnight lows near 1901 and 1893 of two days ago. There is another very important support level near 1887.75.

Short action intraday is trending currently unless we have a bounce and positive retest of 1931.75 with momentum shifts.

If you’re interested in the live trading room, it is now primarily futures content, though we do track heavily traded stocks and their likely daily trajectories as well – we begin at 9am with a morning report and likely chart movements along with trade setups for the day.

As long as traders keep themselves aware of support and resistance levels, risk can be very adequately managed to play in either direction as bottom picking remains a behavior pattern that is developing with value buyers and speculative traders.

Twitter:  @AnneMarieTrades

The author trades stock market futures every day and may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.