The Futures In Five: Stock Market Volatility Compressing

The SPX spread expiring tomorrow is currently tighter than average -around 14 points at the 2795 strike. This leaves us 2781-2809 as our edges to watch for expansion or reversal.

Like yesterday, traders are attempting to stage bounces under a bit more divergence.

Though prices could see higher levels, they are likely to fall again at lower highs back into congestion (this is my general estimation of price trajectory today).

My suspicion is that because volatility is compressing and price action is tight, traders are waiting for some kind of catalyst to move.

Sign up for our FREE newsletter
and receive our best trading ideas and research

With divergence continuing, we can see long wicks so keep your eyes on daily and weekly support levels as bounce zones.  

Eventually, these bounces will give into lower tests of deeper support as we have very unusual price expansions that will give ‘reversion to the mean’ traders a great deal of fuel with which to work.

Stock Market Futures Update – February 28, 2019

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.