Macro Trading Outlook for S&P 500 Futures – August 23, 2016
Early morning finds stock market futures up a bit and battling congestion. S&P 500 futures are just above congestion at 2186, as charts hold their bullish slant. A breach above 2187.75 may only take us to the top of the range near 2190.75. Stock market momentum is flat, suggesting range bound motion on the S&P 500 (INDEXSP:.INX). Stocks need energy present for follow through when price action stretches upward. Price support sits near 2172.25 with 2169.5 below that. Price resistance sits near 2188, but could stretch into 2190.75, if traders try to break out to the upside. Above the high of 2190.75 lies 2194.5. But again, that seems unlikely to hold even if it does test the region above.
See today’s economic calendar with a rundown of releases.
RANGE OF TODAY’S MOTION
S&P 500 Futures Trading Outlook For August 23 – ES_F Trading Chart
Upside trades on S&P 500 futures – Favorable setups sit on the positive retest of 2187.5, or a positive retest of the bounce off 2179.5 with upward momentum. If we spike downward into 2172.75, it should prove out as a bounce zone, as well. I use the 30min to 1hr chart for the breach and retest mechanic. Targets from 2179.5 are 2181.75, 2184.5, 2187.5, 2189.5, 2191.5, 2194.5, and if we expand, we may stretch above into 2197.75 and 2199.75. Breakouts that hold seem very unlikely in this environment.
Downside trades on S&P 500 futures – Favorable setups sit below the failed retest of 2179, or at the failed retest of 2185.5 with negative divergence. Keep your eyes on the lookout for higher lows developing intraday. Retracement into lower levels from 2185.5 gives us the targets 2183, 2180.5, 2177.75, 2175.5, 2172.25, 2169.5, 2165.5, 2162, 2158.5, and 2154.75, if sellers take over. Breakdowns that hold seem very unlikely in this environment.
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Nasdaq Futures (NQ_F)
The NQ_F drifted to the top of its congestion, spiked into 4829.75, and returned to rest at upper congestion near 4825. Momentum is near zero, suggesting sideways motion, but some evidence of potential breakout exists. Upper support sits at 4796.5. Below that, we see congestion near 4792.25 -4789.5 that will serve as lower support. Resistance is higher today, between 4824.75-4832.75, with a breach that could stretch into 4837, if buyers hold power. Pay attention to lower highs or lower lows developing, as this could signal a shift to downside action.
Upside trades on Nasdaq futures – Favorable setups sit on the positive retest of 4817.5, or a positive retest of 4796.5 with positive momentum. I use the 30min to 1hr chart for the breach and retest mechanic. Targets from 4796.5 are 4803.75, 4809.25, 4812.75, 4814.5, 4817.5, 4822.75, 4829.5, 4832, 4835.75, 4838.5, and 4844.25, if buyers continue the rally north.
Downside trades on Nasdaq futures – Favorable setups sit below the failed retest of 4816.25, 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, 4817.75, 4814.5, 4811.75, 4809.25, 4805.75, 4801.75, 4796.75, 4792.75, 4789.5, 4785.5, 4777.75, and 4771.5 to 4767.5, if sellers resume control.
Crude Oil
As suggested yesterday, the drift into the gap occurred, finishing up this morning and bouncing off 46.8 support. I suspect the bounce will fail at a lower high. Currently support holds at 46.5, near some moving averages, but there is still a fair chance that the chart will test 45.6 before moving forward over the coming days. Resistance sits near 48.06, with 48.52 above that.
Trading ranges for crude oil should hold between 45.5 and 48.15 today.
Upside trades on crude oil can be staged on the positive retest of 47.49, or at a positive retest off 46.96 with positive momentum. I often use the 30min to 1hr chart for the breach and retest mechanic. Targets from 46.96 are 47.14, 47.33, 47.6, 47.76, 47.9, 48.05, 48.15, 48.52, 48.73, 49.09, and the outside chance that we see 49.48, if buyers power forward.
Downside trades on crude oil can be staged on the failed retest of 47.11, or at the failed retest of 47.55 with negative divergence. Targets from 47.55 are 47.15, 46.82, 46.6, 46.44, 46.32, 46.16, 46.07, 45.94, and 45.57, if sellers continue control.
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.
Twitter:Â Â @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.
