The Morning Report: Will Support Hold This Time?
The futures markets are sharply lower this morning as traders move in to test support of S&P 500 futures at the 1992-1995 regions. Momentum is negative, but largely mixed across timeframes.
At this writing, we sit clearly at S&P 500 futures support zones of consequence. Breaking and holding below 1995.5 will lead to a lower congestion area nearby. Expect buyers to stage a bounce from that level. 1985 looks like another area value buyers may try to stop sellers from moving the chart further south, if we lose this level definitively.
Intraday resistance sits near 2014.25. Intraday support sits at 1995.5. Breaks of either support or resistance must be confirmed for trending trades on the day to hold. We have a bearish momentum formation in the shorter cycles and time frames of the charts that suggest S&P 500 futures bounces into resistance regions near 2014 will be sold at first test. Resistance also sits at 2008.
Shorter time frame momentum indicators are negative, and lower than Thursday (Friday was a US market holiday). Longer cycles are upward trending and holding in positive territory.
See today’s economic calendar with a rundown of releases.
RANGE OF TUESDAY’S MOTION
Crude Oil Futures (CL_F)
Oil prices have been trapped in a trading range for several days This range appears to be between 36.4 and 38.3 – with breaches on either side that have not held. Strong support still looks like 36.4. Momentum is mixed across time frames, and traders seem willing to trade the ranges waiting for volume to punch the move in either direction. The bigger picture still suggests a basing formation but the EIA reports continue to consistently show builds of crude oil.
Moving averages suggest that the chart may be trying to develop more bullish activity. With mixed motion, it is very likely that breach in either direction will be retraced. Because the chart is caught in a range, we are essentially looking at the same setup from last week. Intraday trade setup suggests a long off 36.9 into 37.2, 37.48, 37.8 and perhaps 38.3 even more if the buyers take over on volume at the breach of the level – see the blog for levels above that region. Below a 36.7 failed retest or a rejection of the 38.3 area sends us to 37.85, 37.4, 37.05, 36.87and 36.6. Momentum on longer time frames is mixed and holding.
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.
Aggressive upside motion is best setup on the breach of 2003.5 with a stop near 2000 – or a bounce off 1998 (as long as momentum is holding). A bounce off 1995.5 would make the deepest long setup after a retrace into support with targets near 1998, 2000.5, 2003.5, 2007.25, and 2011.75- watch 2014.5 for sellers to try to reverse the trend of the bounce. The hold of the 2014.5 region will likely advance buyers and bring more upside into resistance above at 2023.5, 2026.25, 2029.75, 2031.5 and 2034.25. Long trades are counter trending at this writing but pullbacks into higher lows may reverse the intraday trend.
Downside motion opens below the failed retest of 2012 (with negative momentum-this would look counter trend in tight time frames), or at the failure to hold 2007.5 opens the short. Retracement into lower levels from 2012 gives us the targets at 2007.5, 2004, 2001.75, 1998.5, 1995.5, 1990.25, and perhaps 1985.5.
Short action intraday is trending currently unless we have a bounce and positive retest of 2003.5 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.
