S&P 500 Futures Trading Outlook For August 16th

S&P 500 Futures Outlook for August 16, 2016 – Stocks Test Support Levels

Heading into stock market futures trading August 16, we still see charts expanding to the upside, even if a bit sluggishly. Buyers continue to lift the charts at support levels. And bulls will look for buying once more on this minor pullback. Stay disciplined – momentum on S&P 500 (INDEXSP:.INX) continues to flatten, but is holding positive.

We continue to watch the price action and selectively pick long trades on market pullbacks. Price support sits near 2178.5 and heavy congestion lies between the 2174-2177.5 region. Price resistance is shifted up slightly into 2191.5, but that could stretch into 2193 if bulls return today.

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

RANGE OF TODAY’S MOTION

S&P 500 Futures Trading August 16 – ES_F Chart

Upside trades on S&P 500 futures – Favorable setups sit on the positive retest of 2181.5, or a positive retest of the bounce off 2186 with upward momentum. I use the 30min to 1hr chart for the breach and retest mechanic. Targets from 2181.5 are 2183.5, 2186, 2189.5, 2191.5, 2193.25, and if we expand, we may stretch above into 2196.75 and 2198.75. Trading remains timid, but I expect a slow grind upward.

Downside trades on S&P 500 futures – Favorable setups sit below the failed retest of 2180, or at the failed retest of 2183.75 with negative divergence. Keep your eyes on the lookout for higher lows developing intraday. Retracement into lower levels from 2183.75 gives us the targets 2180.75, 2177.75, 2175.75, 2172.5, 2169.5, 2164.5, 2161.5, 2157.5, and 2153.5, if sellers take over.

Nasdaq Futures (NQ_F)

The NQ_F broke to new highs once again in trading yesterday, just three ticks shy of our target at 4836. The chart has since retraced, but bounced off our 4811 breakout levels. Big expansions upside should still fade, as momentum remains indecisive. Support sits at 4811. Below that, we see congestion near 4802.25 -4796.5 that will serve as lower support. Resistance is higher, between 4832.75-4838.75, with a breach that could stretch into 4842, if buyers continue their press forward. Retests of support action for long entries have worked nicely, and should continue to do so. Pay attention to lower highs or lower lows developing, as this could signal a rollover event.

Upside trades on Nasdaq futures – Favorable setups sit on the positive retest of 4824.5, or a positive retest of 4811.5 with positive momentum. I use the 30min to 1hr chart for the breach and retest mechanic. Targets from 4811.5 are 4814.25, 4816.25, 4818.25, 4822.75, 4824.5, 4829, 4832.75, 4835.75, 4838, and 4842.5, if buyers continue the rally north.

Downside trades on Nasdaq futures – Favorable setups sit below the failed retest of 4811, or at the failed retest of 4824.5 with negative divergence (particularly important here). Retracement into lower levels from 4824.5 gives us the targets 4821.75, 4818.25, 4814.5, 4811.5, 4806.25, 4802.25, 4797.5, 4793.75, 4790.25, 4786.5, 4781.5, 4776.75, and 4772.5 to 4766.5, if sellers resume control.

Crude Oil

Oil continued its rally into resistance levels just above our final target at 46.04 from yesterday’s trade setups, after retesting the important level near 45.39. Support holds at 45.24, but we are holding well above those levels at this time. Resistance sits near 46.42, with 46.78 above that.

Trading ranges for crude oil should hover between 45.24 and 46.78.

Upside trades on crude oil futures can be staged on the positive retest of 46.06, or at a positive retest off 45.42 with positive momentum. I often use the 30min to 1hr chart for the breach and retest mechanic. Targets from 45.42 are 45.39, 45.57, 45.74, 45.95, 46.04, 46.26, 46.42, 46.58, 46.79, and the outside chance that we see 47.07, if buyers power forward.

Downside trades on crude oil futures can be staged on the failed retest of 45.87, or at the failed retest of 46.79 with negative divergence. There is also a short sitting at range expansion into 46.08, but that would be an unusual stretch and need quite a bit of divergent action. Targets from 46.79 are 46.58, 46.42, 46.28, 46.16, 45.95, 45.74, 45.54, 45.42, 45.22, 45.08, 44.97, 44.74, 44.47, 44.24, and 43.86, if sellers really resume control.

If you’re interested in watching these trades go live, join us in the live trading room from 9am to 11:30am each trading day.

Visit TheTradingBook.com for more information.

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 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.