S&P 500 Index Futures Price Analysis – Chart Image (October 14)
Earnings began last week but kick into gear this week.
We will also see more US-China trade news, options expiration, full moon – add whatever you wish to the list… This week is likely to create exceptional trading ranges and swings on S&P 500 Index futures.
Learning to manage your risk so that you don’t blow up an account will be your challenge as an inconsistent performance type trader.
Consistent traders manage their risk. They are not always swinging for the fences. They manage the mental and physical capital in their accounts. Something is going to give- edges on either end WILL expand in dramatic fashion the longer we stay in the range.
THE WEEKLY PRICE ACTION
Neutral action, and reduced to slightly negative momentum are now present. Indices are in higher edges of the volatility range noted. Messy trading continues. S&P 500 Index futures closed the week prior near our critical zone of 2972 – but sit below it currently. Pullbacks ought to be buying regions but news algorithms make the ranges wide so use caution jumping in – particularly if we fade through 2956. This is options expiration week and a significant amount of volatility into expiration is being priced. BE CAREFUL, folks – complacency is a portfolio KILLER.
COMMODITY & CURRENCY WATCH
Gold prices are struggling to recapture 1500 – messy support should be troubling to buyers here as we continue to fail at resistance. We appear to be in a flag pattern with negative slope. Use caution with size – there is significant risk in the chart.
The US dollar has lost 99 and landlocked again near 98.87. Losing 97 will change this outlook- right now we hold above 98.3, which is the baseline breakout region. WTI sits in the 53.4 support area in a gloomy outlook with every bounce being faded. Failure to close the prior week above 54 leaves us range bound- deep support zone near 51.40 which was broken and quickly recovered but a revisit here is certainly on the table.
TRADING VIEW & ACTION PLAN
Buyers are struggling near 2961.5-2964 on S&P 500 Index futures – a familiar region of congestion. We will likely fill the gap but sellers sit above waiting for more downside action at this time. The breach above Friday’s close will empower buyers. Be patient and wait for your setups. Mixed undercurrents exist. Realize that we could bounce higher than anticipated and fade deeper than anticipated before returning to the range. Follow the trend in the shorter time frames and watch the price action.
The theme of motion is NEGATIVE AS LONG AS WE HOLD BELOW 2956ish today (with bounces failing and deep pullbacks holding)-and POSITIVE AS LONG AS WE HOLD ABOVE 2982ish today – choppy inside the range. Do what’s working and watch for weakness of trend. Please log in for the definitive levels of engagement today.
METASTOCK SWING SHORT – I am active short 2 at 2973 and added 2 contracts at 2992 – the first target was 2961 where we went back to 2 contracts. Failure to breach and hold will have us looking for a red diamond that will allow me to increase my size. I cannot increase size at this time as my signals tell me that I am not in a primary bearish pattern but instead a bullish pattern that is losing strength.
Intraday LONG trading from support edges like the VWAP or solid moving averages will give you the least risk event for engaging. Intraday SHORT trading from resistance edges like the old highs will give you the least risk event for engaging. Follow the candle trend until candles stop breaking higher.
Learn more about my services over at The Trading Book site.
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.