The Morning Report: S&P 500 Futures Vulnerable Beneath 1929
Earnings season is on the horizon. And early market bounces into critical support levels brings us into Monday morning. The sellers have control here but both buyers and sellers will be watching the fairly vulnerable level of 1930 on the S&P 500 futures.
The form I expected continues and only resistance tests seem likely ahead and not reversals until the charts can give us a cycle of higher lows and higher highs.
Intraday resistance for the S&P 500 futures sits near 1931.50. Intraday support sits at 1890. 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 1923.5). We have bearish momentum formations, but they are lifting as we try to recapture support near this very important level near 1930.
Shorter time frame momentum indicators are negative, and higher than Friday. Longer cycles are downward trending and 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 resumed its failure to hold lows on the overnight motion on Friday and this morning has revisited regions very near the lows of Jan 7. The forms are the same – making resistance tests and failure 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 for crude oil are between 32.23 and 33.65, with 32.8 being an important support level to hold.
Moving averages in crude oil are still clearly negative on longer time frames, but flattening. Momentum is securely negative and very expanded. This is still the likely formation creating opportunities for buyers to attempt bottom picking – only good for the short term at this time – the sellers could force the collapse of support easily. Inflection levels are often quite difficult to trade so use caution. Intraday trade setup suggests a long off 32.8 retest (counter trend big picture but holding from an inflection perspective) into 33.1, 33.24, 33.53, and perhaps 34.1 and 34.6– see the blog for levels above that region. Below a 32.7 failed retest or a rejection of the 33.7 area sends us to 33.57, 33.35, 33.15, 32.8, 32.77, 32.42, 32.1, 31.47, and 30.6 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 of the S&P 500 futures is trying to bounce but resistance levels remain selling zones. 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 1902 and 1896. 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. You can also visit The Trading Vault to learn how to trade the way I do.
As long as a trader keeps 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 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.
