S&P 500 Futures Trading Outlook For December 20

Stock Market Outlook for December 20, 2016 –

A wedge like pattern on the S&P 500 Index (INDEXSP:.INX) loosely formed yesterday and now looks a bit more like an ascending triangle. Bullish formations on S&P 500 futures suggest a breach of 2065 is likely, but the breach should not hold at the first extension into 2269 and higher. The retest of the breakout will be key.

Watch for the confirmation of noted price levels before getting involved. It is much better to manage risk thresholds this way. The line in the sand for buyers to hold will be 2255, and below that, 2251. Price resistance remains at 2269 on futures, but could breach to test 2272.50, then 2282.75, if the charts continue with higher lows.

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

TODAY’S RANGE OF MOTION

E-mini S&P 500 Futures Trading Chart For December 20

Upside trades – Two options for entry

Positive retest of continuation level:  2265.25 (careful here – a retest is required)

Positive retest of support level:  2255

Opening targets ranges:  2257.25, 2260.50, 2263.75, 2267.5, 2269, 2271.25, 2272.75, 2275.50, 2278.25 and 2282.50

Downside trades – Two options for entry

Failed retest of resistance level:  2260 (needs retest confirmation)

Failed retest of support level:  2253.25 (also needs confirmation due to price forms)

Opening target ranges:  2257, 2254.75, 2251.5, 2249.50, 2246.50, 2242.75, 2238.75, 2234.75, 2231.50, 2227.75, 2224.25, and 2224.25

Nasdaq Futures

The NQ_F holds a tight channel over the last 20 hours, or so, after making a new high yesterday. This morning’s ranges are very tight, and so we’ll be looking for a breach of price action. This is very similar to Monday’s setup with a big bounce to the north and failure as the projected pattern. Momentum is holding steady, and traders are now holding 4936 as support. Resistance now holds near 4947 to 4957. There is an auction vacuum that sits in the range between 4878 and 4890, but support for traders looks like 4926 to 4917.75 should the chart fail to hold 4936.

Upside trades – Two options

Positive retest of continuation level:  4947.50 (needs confirmation)

Positive retest of support level:  4926.50 (also needs confirmation)

Opening target ranges:  4930.25, 4936.50, 4942.25, 4947, 4952.25, 4957.75, 4965.50, 4972.25, 4979.75, and 4988.75

Downside trades – Two options

Failed retest of resistance level:  4957.50 (careful here – negative divergence needs to be present)

Failed retest of support level:  4936

Opening target ranges:  4952.25, 4947.5, 4944.75, 4937.25, 4931.50, 4925.75, 4920.75, 4914.25, 4907.50, 4902.75, 4898.75, 4883.75, 4876.25, 4872.25, 4863.75, 4859.75, 4854.75, and 4847.50

WTI Crude Oil

The oil chart is bouncing this morning, back into resistance levels seen Sunday night. Momentum is mixed, but still holds generally positive. Yesterday’s resistance is being tested as we speak, near 53.59, and though it sits at resistance now, it seems that it could easily breach and retest as new support though the day. The positive retest of this region represents long opportunities into higher levels near 54.1, and then 54.55.  Jagged trading should be the order of the day, as trending formations have not strengthened. Support levels are near 52.84, and 52.22 below that.

Upside trades – Two options

Positive retest of continuation level:  53.39

Positive retest of support level:  52.82

Opening target ranges for non-members:  52.34, 52.64, 52.97, 53.23, 53.41, 53.6, 53.86, 54.04, 54.21, 54.5, 54.97, and 55.4

Downside trades – Two options

Failed retest of resistance level:  53.29

Failed retest of support level:  52.8

Opening target ranges for non-members:  53.06, 52.84, 52.55, 52.32, 52.09, 51.85, 51.57, 51.32, 51.08, 50.27, 50.13, 49.87, 49.6, 49.27, 49.05, and 48.92

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 for more information.

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:  @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.