S&P 500 Futures Rally Update: How High?

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S&P 500 Index Futures Trading Chart – November 12

MARKET COMMENTARY

Traders continue to hold the S&P 500 Index INDEXSP: .INX in a breakout range for the fourth day.

We haven’t really been able to lift higher through premarket highs but if we do that, we’ll see new breakout levels. The S&P 500 Index is pricing 24 points at the 3085 straddle before the expiration on Friday.

Trading ranges are still compressing. Don’t chase the trades as price action is choppy and will give you room to engage on either side.

Countertrend shorts are just that – countertrend with a short shelf life, unless we lose 3072. Pullbacks, even if they jolt us by their deepness will very likely be buying areas, especially at the first pass into deeper weekly levels.

THE WEEKLY PRICE ACTION

S&P 500 index futures held over 3072 last Friday to confirm the weekly breakout formation. As we continue this week, dips near 3047-3063 are presenting possibilities as support tests through the week, while the punch out to 3114 all the way to 3137 still stay upshot targets.

Positive momentum is continuing to flatten but holding. Weekly patterns remain strong as do the monthly patterns- from a price perspective – so all eyes will be at the first potential hold above 3072 (which held well so far). Be cautious adding to swing positions in either direction – particularly if you are considering shorts- as markets are not currently showing that short positions can gain traction at this time.

COMMODITY & CURRENCY WATCH

Gold has lost the low of last week after a failed weak bounce to congestion near 1469- we’re at that first dip target mentioned yesterday – near 1454, and ahead we see 1445 and then 1434 as next targets down. Bottom pickers are present. Use caution with size – there is significant risk in these charts, in both directions as the gold chart is often used as a hedge and is prone to savage moves.

The US dollar has recovered a major support region and now holding above 98, re-entering the long channel and pressing higher. Resistance so far has been strong at 98.7 with 98.4 just below. WTI sits above 57 after buyers lifted us off the lows into heavy congestion. Whipsaw is the only word I have here as traders reject the undertone created by the builds showing in the oil inventories and continue to hold higher support. Resistance sits at 57.85 to 58.4. 

TRADING VIEW

Buyers will have more strength above 3092.75 in the ES_F which will hold as minor breakout region with sellers continuing to wage a battle there.  Presses to the upside have been finding sellers in place. Breaching 3089 will make for another push by buyers into prior highs. Those new targets sit near 3112 and a wide bounce to 3137 where option sellers are clearly sitting.

Broadly speaking, buyers have the advantage as long as we hold 3073- which is where we bounced in last Wednesday’s range. The support below that is 3052ish, so the loss of 3063 opens that level below.  Be patient and wait for your setups – this means we wait for key support to engage and we don’t step in front of moves. Understand what your levels mean and prepare for the potential behavior at those levels. Realize that we could bounce higher than anticipated and fade deeper than anticipated before returning to the trend and range – Follow the trend in the shorter time frames and watch the price action.

The theme of motion is:

POSITIVE AS LONG AS WE HOLD ABOVE 3082ish today (with big spikes likely fading back into congestion)

CHOPPY BETWEEN 3082 AND 3072

NEGATIVE AS LONG AS WE HOLD BELOW 3072ish today (with sharp bounces failing and deep pullbacks holding)– choppy inside the range.

Do what’s working (that means follow short trend and momentum signals while in the intraday spaces) and watch for weakness to develop away from your trade direction in order to leave. 

Learn more about my services over at The Trading Book site.

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.

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