Stock Market Futures Climb Higher As Bulls Make A Move

Stock Market Futures Outlook for May 24, 2016  (S&P 500 futures – ES_F) – Resistance spans up to 2059.75. Holding 2053 for the early hours may help see expansion upwards. Buyers continue to surprise just when the charts begin to look weak, as they did yesterday.

Signs of weakness can only be verified by collapse of price and as long as we hold support, we are left with only the reality that buyers are poised to participate at value areas.

Momentum on the four-hour chart is bullish, and lifting but sitting just inside trending spaces. As yesterday, bounces will hit resistance and fade, but any fades today are quite a bit more likely to bring higher support if the momentum formation holds stable in the moves of price. As stock market futures are clearly range bound, traders skilled in execution while in the formation will see the edges near 2055-2057 and likely have a 2 point stop, while watching for the higher low to invalidate the continuation of downside movement. Traders anticipating the breakout will trade the retest of the breakout level or the deeper morning dip into support near 2048.5. The edges of support and resistance in range based formations give us high rates of return, if we are wise to remove at first and second targets, as well as pay attention to our stops and risk relationships.

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

THE RANGE OF TUESDAY’S MOTION

E-mini S&P 500 Futures  (ES_F)

S&P 500 Futures Outlook for May 24, 2016 – Momentum sits with the buyers for another day, and they are holding support at this writing. Yesterday, this formation was also present but price did not move much. Holding 2041 again was key for buyers. Sellers can keep control by holding 2054-2057.75.

Upside trades on S&P 500 futures – Favorable setups sit on the positive retest of 2057.5, or a positive retest of 2052.5 with positive momentum. I use the 30min to 1hr chart for the breach and retest mechanic. Targets from 2053.5 are 2055.25, 2057.5, 2059.5, and if we can catch a bid there, we could expand into 2061.5, 2063.5, and 2067.5.  A retest of these levels that hold will press the chart into resistance ahead near 2071.5.

Downside trades on S&P 500 futures – Favorable setups sit below the failed retest of 2046.5 or at the failed retest of 2055.5 with negative divergence. It is important to watch for higher lows to develop with the 2046.5 entry as the chart remains extremely congested near this zone today. Retracement into lower levels from 2055.5 gives us the targets 2052.75, 2050.5, 2047.5, 2043.25, 2041.5, 2038.5, 2034.5, 2031.25, 2029.5, 2026.5, and perhaps a retest near 2025 before bouncing. It seems most unlikely that we test these lower regions at this writing based on momentum readings.

Have a look at the Fibonacci levels marked in the blog for more targets.

Crude Oil Futures (CL_F)

Outlook for Crude Oil Futures May 24, 2016  (CL_F) – Note that there’s an API report after the close – the report is likely to show a draw with Nigeria and Libya still offline. As I suspected yesterday, bounces in oil prices did fail, but there was certainly some arguing in the movement. This morning, we sit at an important support region near 47.9 with mixed momentum. It seems that bounces will continue to fail, but surprise news releases could also shift this chart back up. The general consensus is that we drift down into support, with a few folks still believing that crude oil prices should test 50 before a roll south.

The trading range for oil prices suggests support action near 47.03, and resistance behavior near 48.68.

Upside trades on crude oil futures can be staged on the positive retest of 48.26, or after a dip into 47.76, but carefully watch for a lower high to develop with the drift down. I often use the 30min to 1hr chart for the breach and retest mechanic. Targets from 47.76 are 48.12, 48.27, 48.34, 48.52, and 48.65. If we expand over that, we could see 48.8, 49.09, and 49.29.

Downside trades on crude oil futures continue to setup well below failed retests. Today, this is the failed retest of 47.67, or the failure at the retrace of 48.64 under negative divergence gives us the trades with high reward to risk events. Retracement into lower levels from 48.64 give us the targets 48.54, 48.37, 48.23, 48.04, 47.76, 47.42, 47.26, and perhaps 47.04, 46.76, and 46.44.

Have a look at the Fibonacci levels marked in the blog for more targets.

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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.