S&P 500 Futures Trading Outlook For October 28

Stock Market Outlook for October 28, 2016 –

I have to say that I always get a little excited when the S&P 500 (INDEXSP:.INX) trades into a price area that creates a battle of wits – where many bright traders see the same patterns and then begin to trade against each other. This is what I saw yesterday and overnight on S&P 500 futures as we tested deep edges of price support. The market has since bounced into a price resistance zone. Beautifully, though, as the edges broke and held for a short time, they quickly reversed back into the congested zone near 2126.  The move overnight expanded the range, but bounces from the lows have futures mildly green. We should still remain range bound into the election. Tight congestion pattern is present between 2123 to 2127, and 2133 to 2137. Support holds near 2113-2107, and resistance sits at 2151-2154.

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

TODAY’S RANGE OF MOTION

S&P 500 Futures Trading Chart – October 28

Upside trades on S&P 500 futures – Favorable setups sit on the positive retest of 2131.75, or a positive retest of the bounce off 2123 with upward momentum. I use the 30min to 1hr chart for the breach and retest mechanic. Targets from 2123 are 2126.5, 2130.75, 2136.5, 2140.5, 2142.5, 2144.75, and 2149.5. As always, additional targets will be in the Members only portion of the morning blog.

Downside trades on S&P 500 futures – Favorable setups sit below the failed retest of 2121.5, or at the failed retest of 2130.5(watch for the higher low if this is attempted) with negative divergence. Retracements into lower levels from 2130.5 give us the targets of 2127.5, 2125.25, 2123.5, 2120.25, 2117.75, 2116, 2112.5, and 2107.25.

Nasdaq Futures

The NQ_F followed the path of the $ES_F down, and ran into the familiar level near 4787, but it has also returned to congestion levels of interest. The level to breach in the $NQ_F will be 4818 and as long as we stay below that level we will be prone to sell off. New resistance areas are 4838 to 4854. Today’s support sits in the region between 4754 and 4780.

Upside trades on Nasdaq futures – Favorable setups sit on the positive retest of 4818, or a positive retest of 4790 with positive momentum. I use the 30min to 1hr chart for the breach and retest mechanic. Bounces might be big, but are likely to give way to selling in the current pattern. Targets from 4790 are 4806.75, 4814, 4817.5, 4824, 4829.5, 4833, 4840.5, 4848, 4851.75, 4855, 4862.25, 4866.25, and 4871.5.

Downside trades on Nasdaq futures – Favorable setups sit below the failed retest of 4817 (needs negative momentum here for continuation), or at the failed retest of 4851 with negative divergence. Retracements into lower levels from 4851 are 4848, 4844.5, 4840.25, 4834.75, 4829.5, 4818, 4814, 4806.5, 4801.75, and 4976.25. See the blog for additional targets.

Crude Oil

The WTI chart continues to move in a sideways path. Our support level of 49 held yesterday but a retest of the level looks likely. The sentiment continues as negative in the short term – so the battle to be won remains at 49. Big spikes in either direction will likely drift back into the region between 49.4 and 52.42 for the week.

Trading ranges for crude oil futures have expanded- 48.11 to 52.42 in the current pattern.

Upside trades on crude oil can be staged on the positive retest of 49.62, or at a positive retest off 49.02 with positive momentum. I often use the 30min to 1hr chart for the breach and retest mechanic. Targets from 49.02 are 49.28, 49.6, 49.79, 50.06, 50.34, 50.74, 50.96, 51.09, 51.36, 51.65, 51.82, 52.02, and 52.24 to 52.42.

Downside trades on crude oil can be staged on the failed retest of 49, or at the failed retest of 50.02 with negative divergence. Targets from 50.02 are 49.86, 49.68, 49.61, 49.33, 49.11, 49.02, 48.69, and 48.34.

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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.