S&P 500 Futures Trading Outlook for July 22, 2016 –  A look at stock market futures using the S&P 500 futures chart (ES_F) shows poor volume on the breaches from Wednesday into the fade. S&P 500 futures lost 2155 yesterday before quickly recovering it.
Today, in the continuing bullish environment, the chart has bounced overnight.  We tested 2164.5 and congestion above sits between 2165 to 2168 – this will act as resistance today. Price support to watch below is still 2151, but the overnight low is higher at 2156. Below that, we see 2145.5 and 2139.5. Price resistance above still sits near 2167.75 to 2179.75- we are consolidating up here. The charts are working off very high momentum levels but not essentially losing any real traction. This prims the pump for higher prices ahead and may bode well for the S&P 500 (INDEXSP:.INX), etc… However, everything has to do with how well buyers manage the overhead supply here.
See today’s economic calendar with a rundown of releases.
RANGE OF TODAY’S MOTION
S&P 500 Futures Trading Chart (ES_F) – July 22
Upside trades on S&P 500 futures – Favorable setups sit on the positive retest of 2164.5, or a positive retest of the bounce off 2159 with positive momentum. Remember that the feel of the chart is congestion, so breakouts will be difficult to maintain. I use the 30min to 1hr chart for the breach and retest mechanic. Targets from 2159 are 2161.75, 2164, 2168.25, 2171.25, 2175.75, 2179.75, and if we expand, we may stretch above into 2181.75.
Downside trades on S&P 500 futures- Favorable setups sit below the failed retest of 2158.75 or at the first failed retest of 2166.5 with negative divergence. As this is still a relatively countertrend trade keep your eyes on the lookout for higher lows developing intraday. Retracement into lower levels from 2166.5 gives us the targets 2164.25, 2162.25, 2159.25, 2157.75, 2155.5, 2153.5, 2149.75, 2145.75, 2143, 2141.75, 2138.75, 2136.5, 2134.5, 2128.25, 2124.5, 2122.75, and 2120.75 to 2118.5, if sellers take over.
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Nasdaq Futures (NQ_F)
The NQ_F blasted through several levels as it did back on July 8, out of a congestion area. Key difference between Wednesday breach and the breach of July 8 has everything to do with volume and associated momentum, and it brought us the drift down. Thursday’s fade came right into higher support near 4627 before buyers took charge again. Remember that the NQ_F has yet to test prior highs and is lagging in performance to the ES_F. This gives it opportunities to expand that the ES_F does not quite have here at this time. New support is near 4627-4624, with a lower break into 4611, if sellers gain traction. The chart is congested between 4635 and 4653.
Upside trades on Nasdaq futures – Favorable setups sit on the positive retest of 4645.5, or a positive retest of 4635.75 with positive momentum. I use the 30min to 1hr chart for the breach and retest mechanic. Watch for the lower high to develop near 4644.5, if sellers exercise more power intraday with lower tests of support. Targets from 4635.75 are 4641.25, 4644.75, 4649.25, 4653.75, 4658.25, 4664, and 4677.75 if buyers continue the rally north. Price is likely to retreat to support at these higher levels, so be careful, and if you like trading the edges, a countertrend short could open up there.
Downside trades on Nasdaq futures – Favorable setups sit below the failed retest of 4634.5, or at the failed retest of 4653.5 with negative divergence. Watch those moving averages and trend lines when taking the shorts. Retracement into lower levels from 4653.5 gives us the targets 4644.75, 4641.5, 4637.75, 4632.75, 4627.5, 4624, 4621, 4618.75, 4615.75, 4614, 4611.25, 4606.75, 4598.75, 4592.5, and 4585.5 to 4580.75, if sellers resume control.
Crude Oil
Thursday’s price action on crude oil continued in the direction of trend. The failure of 45.5 to hold its retest was the signal that further downside was indeed likely. Momentum is negative, but flattening a bit as buyers try to pick a bottom here. The key hold will be above 44.48. Above this area, buyers will try to lift the chart back into the 45 area.
Trading ranges for crude oil begin today between 44.04 to 45.86 – I doubt we pop back into the upper edges of the range hear, and the charts seem to point to a drift below.
Upside trades on crude oil are quite countertrend here, but with the deep fade yesterday, we could see room for this develop further – they can be staged on the positive retest of 44.86, or at a bounce off 44.64 with positive momentum. I often use the 30min to 1hr chart for the breach and retest mechanic. Targets from 44.64 are 44.82, 45.03, 45.22, 45.45, 45.72, 46.01, 46.23, 46.48, and perhaps, 46.68, if buyers really take control.
Downside trades on crude oil can be staged on the failed retest of 44.6, or at the failed retest of 45.45 with negative divergence. Targets from 45.46 are 45.22, 45.03, 44.84, 44.67, 44.48, 44.29, 44.16, 44.04, 43.84, and 43.65, if selling really takes hold.
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. It is now primarily stock market futures trading 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. Visit TheTradingBook.com for more information.
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.
