S&P 500 Futures Trading Outlook For October 5

Stock Market Outlook for October 5, 2016 –

Whipsaw trading continues to be the hallmark of the markets each day. Seems the S&P 500 Index (INDEXSP:.INX) is in a range; bounded from below by buyers, and above by sellers. Price support has drifted lower into 2140 on S&P 500 futures. Yesterday, price support was at 2151, and we traded below that to lower levels. That action gives the chart a bit of a bearish slant on the day. However, in range bound environments, this matters little. Price resistance on S&P 500 futures appears to be at the 2157 region, and we sit below moving averages on intraday time frames.  The breakout level remains 2168.

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

TODAY’S RANGE OF MOTION

S&P 500 Futures Trading Outlook For October 5

Upside trades on S&P 500 futures – Favorable setups sit on the positive retest of 2155.5, or a positive retest of the bounce off 2143.25 with upward momentum. Charts continue to be congested in these price ranges, so trading is likely to be choppy. I use the 30min to 1hr chart for the breach and retest mechanic. Targets from 2143.25 are 2146.25, 2151.25, 2154.75, 2157.5, 2161, 2163.5, and 2166.5.

Downside trades on S&P 500 futures – Favorable setups sit below the failed retest of 2140, or at the failed retest of 2151.5 with negative divergence. Retracements into lower levels from 2151.5 give us the targets 2148.25, 2145.5, 2141.5, 2136.5, 2134.25, 2132.5 and 2130.5.

Nasdaq Futures

The NQ_F gave us both higher highs and lower lows than the prior day, and still sits above moving averages – clearly stronger than the ES_F. Unfortunately, it is still not lending itself to trend. Support holds at 4848, with 4835 below that. Resistance sits between 4880 and 4890 again today. Momentum is mixed/drifting lower- breakouts are still not likely to hold, while pullbacks into support may continue to be bought, even as support tests get deeper.

Upside trades on Nasdaq futures – Favorable setups sit on the positive retest of 4868.75, or a positive retest of 4857.75 with positive momentum. I use the 30min to 1hr chart for the breach and retest mechanic. Targets from 4857.75 are 4860.5, 4862, 4867.5, 4870.25, 4874.25, 4874.75, 4876.25, 4880.25, 4884, and 4887.25 to 4890.

Downside trades on Nasdaq futures – Favorable setups sit below the failed retest of 4849, or at the failed retest of 4876.5 with negative divergence. Retracements into lower levels from 4876.5 are 4873.50, 4867.5, 4862, 4857.75, 4853.75, 4849.75, 4845.75, 4841.75, 4836.25, 4830.5, and 4824.75.

Crude Oil

API reported another draw that sent oil higher after the close. The WTI contract we trade sits is in a breakout space, but close to resistance levels noted near 50.1. Support for the day is 49.1, with 48.8 below. Buyers are holding an aggressive stance, and pullbacks ought to be bought. Of consequence today, will be the EIA report – if it is similar, the chart may not advance and if they show a build instead of a draw the chart may fall sharply into deeper support.

Trading ranges for crude oil futures should hold between 48.57 and 50.41 in the current pattern.

Upside trades on crude oil futures can be staged on the positive retest of 49.4, or at a positive retest off 49.14 with positive momentum. I often use the 30min to 1hr chart for the breach and retest mechanic.

Downside trades on crude oil futures can be staged on the failed retest of 49.3, or at the failed retest of 49.74 with negative divergence. Targets from 49.74 are 49.54, 49.3, 48.97, 48.64, 48.44, 48.27, and 48.04.

If you’re interested in the live trading room, it is now primarily stock market 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 the trader keeps himself 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.