S&P Futures Decline Into Primary Bounce Zone

The futures market is down for the fourth day breaking through important support and holding below 1968.

China’s markets were halted due to a sharp dip down falling 7% – currency troubles, it seems after a devaluation late last year. Again, though, the S&P 500 futures decline put that index near bounce zones and just like yesterday, it will matter where the bounce holds.

I expect only resistance tests and not reversals until the charts can give us a cycle of higher lows and higher highs.

Intraday resistance sits near 1968.5. Intraday support for this S&P 500 futures decline sits at 1931. Breaks of either support or resistance must be confirmed on tighter time frames (30min/1hr) for trending trades on the day to hold. Buyers are trapped so bounces should be sold. We have bearish momentum formations, but they are becoming extreme and relief bounces and jagged price action is nearby.

Shorter time frame momentum indicators are negative, and lower than Wednesday. Longer cycles are downward trending and moving into negative territory steeply.

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

RANGE OF TUESDAY’S MOTION

Crude Oil  Futures (CL_F)

Oil has continued its downward spiral, testing levels not seen for over a decade. We have our new lows as predicted. Bounces should be into resistance but price action is jagged and swinging wildly so taking the trade of the failure of resistance for short or vice versa for long is best in my mind. Support ranges between 32.03 and 32.5. Buyers will create bounce events at these levels but they are likely not to hold as we head lower. Watch for the appearance of higher lows to direct you here.

Moving averages, though still clearly negative on longer time frames, and momentum is securely negative and very expanded –this is a very trending chart but now sitting again at potential support levels near 32-33. Inflection levels are often quite difficult to trade so use caution. Intraday trade setup suggests a long off 32.1 (counter trend) into 32.5, 32.7, 32.85, and perhaps 33.47– see the blog for levels above that region. Below a 32.4 failed retest or a rejection of the 33.2 area sends us to 32.89, 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 new chart with active S&P 500 futures price support and resistance trading levels. Click to enlarge.

Upside motion on the S&P 500 futures chart has the best setup on the breach of and positive retest of 1945.5 – or a bounce off 1932.5 (as long as momentum shows this as likely to hold). Targets near 1947.5, 1950.75, 1956.5, and 1961.75 seem likely if the bounce holds – but again, all bounces should run into resistance. Watch 1968.5- 1974 for sellers to try to reverse the trend of the bounce. Long trades are counter trending at this writing but pullbacks into higher lows may reverse the intraday trend.

Downside motion for the S&P 500 futures decline opens below the failed retest of 1945.5 or at the failure to hold 1961 bounce. Retracement into lower levels from 1945.5 gives us the targets at 1942.25, 1940, 1936.5, 1932.25, 1930.75, 1927.75 and perhaps 1922.75.

Short action intraday is trending currently unless we have a bounce and positive retest of 1947.75 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 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.