S&P 500 Futures Outlook for August 10, 2016 – Can The Bulls Work Through Overhead Supply?
Trading has been quiet and bound in a tight range as price consolidates at higher levels for the third day in a row. Momentum continues to be bullish but it’s not accelerating. If the S&P 500 (INDEXSP:.INX) is going to get to 2200 or beyond, it will need some more oomph.
S&P 500 futures hover near 2180, and new support builds near 2177; below that, we see 2171 -2168.5. More congestion lies in the 2166.5 region. Price resistance is shifted up slightly into 2184.5, but could stretch into 2187.5 today. Buyers are still in charge, but working through overhead supply.
See today’s economic calendar with a rundown of releases.
RANGE OF TODAY’S MOTION
S&P 500 Futures Outlook – Trading Chart (ES_F)
Upside trades on S&P 500 futures – Favorable setups sit on the positive retest of 2183, or a positive retest of the bounce off 2177 with positive momentum. I use the 30min to 1hr chart for the breach and retest mechanic. Targets from 2177 are 2179, 2181.25, 2183, 2184.5, 2187.5 and if we expand, we may stretch above into 2189.75 and 2190.5.
Downside trades on S&P 500 futures – Favorable setups sit below the failed retest of 2177 or at the failed retest of 2181.5 with negative divergence. Keep your eyes on the lookout for higher lows developing intraday. Retracement into lower levels from 2181.5 gives us the targets 2178.5, 2176.75, 2174.75, 2172.5, 2169.5, 2166.75, 2164.5, 2161.5, 2159.5, 2156.75, and 2153.5, if sellers take over.
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Nasdaq Futures (NQ_F)
The NQ_F holds price while momentum remains flat, but in positive territory. Overhead supply continues to be a problem for the charts. Support sits at 4782. Below that, we see 4778.25 as lower support. Resistance levels are now between 4797-4808.75, with a breach that could stretch into 4818 – 4825.75 in the coming days. Retests of support action for long entries have worked nicely, and should continue to do so. Pay attention to lower highs developing, or the break of support as this could signal a rollover event.
Upside trades on Nasdaq futures – Favorable setups sit on the positive retest of 4787, or a positive retest of 4800.5 with positive momentum. I use the 30min to 1hr chart for the breach and retest mechanic. Targets from 4787.5 are 4793, 4794.75, 4796.25, 4798.25, 4800.5, 4804.75, 4808.75, 4812, 4816.25, and 4818.25 to 4825.75, if buyers continue the rally north.
Downside trades on Nasdaq futures – Favorable setups sit below the failed retest of 4782, or at the failed retest of 4799.5 with negative divergence. Retracement into lower levels from 4799.5 gives us the targets 4794.75, 4791.25, 4787.5, 4784.25, 4781.5, 4776.75, 4772.25, 4766.5, 4762.25, 4754.5, 4746.75, 4743.5, 4739.75, 4735.75, 4730.5, and 4726.5 to 4721.5, if sellers resume control.
Crude Oil
API reports after the close yesterday showed a build of 2.1MM barrels. EIA projections are for .8MM draw –report at 10:30am this morning. This could create some very interesting swings in the chart today due to the disparity. Support looks to be in the vicinity of 41.4, but we are holding 42.1. Pullbacks are still likely to be bought in the current cycle, and big bounces are likely to be sold, as the battle between big players continues.
Trading ranges on crude oil should hover between 41.4 and 43.57, but a surprise build could bring a big dip into 40.5 – I am being cautious today into the numbers.
Upside trades for crude oil can be staged on the positive retest of 42.1, or at a bounce off 42.79 with positive momentum. I often use the 30min to 1hr chart for the breach and retest mechanic. Targets from 42.1 are 42.46, 42.74, 42.97, 43.14, 43.32, 43.54, 43.77, 43.93, and perhaps, 44.14, if buyers really take control.
Downside trades for crude oil can be staged on the failed retest of 42.7, or at the failed retest of 43.5 with negative divergence. Targets from 43.5 are 43.27, 43.08, 42.94, 42.81, 42.7, 42.46, 42.24, 42.11, 41.98, 41.75, 41.63, 41.54, 41.4, 41.16, 40.94, 40.77, 40.57, 40.34, 40.19, 39.87, 39.56, 39.38, 39.26, 39.02, 38.74 and 38.42, but these downward levels seem quite unlikely at this time.
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.
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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.
