The S&P 500 futures (ES_F) sits trapped between wide ranges: by definition, not trending. It is a dreadful place for swing trading breakouts or breakdowns, as charts can quickly reverse. I am not a fan of this strategy, particularly in non-trending markets.
Today, we are in a struggle to hold S&P 500 futures support at 2055. As the market weakens, buyers will perceive value much lower, particularly if we lose the 2045 S&P 500 futures support level on the day’s close. The bigger cycles and market structures show a drift into lower support.
Short term S&P 500 futures support is now near the 2055 mark (we’ve broken so the first retest will show continuation downward if we fail the area; and resistance near 2064.25. Momentum readings are negative. Breaches on either side of those levels should test and return to their breach levels before continuation. Steep pullbacks remain buy zones. Lower highs and lower lows are holding in the drift to deeper support.
Short time frame momentum indicators are negative and falling, and lower than Tuesday. Longer cycles are downward trending, divergent, but still in bullish territory.
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RANGE OF WEDNESDAY’S MOTION
Crude Oil (CL_F)
The relief bounce I mentioned yesterday is still in progress. I mentioned in a tweet and in the trading room that we were likely to hold the bounce as long as the API and EIA reports gave us a less than expected build in inventories. So we wait. The API showed a less than expected build, and we have held the bounce. There are still some trapped buyers in the chart, so sharp downward candles could easily be a problem if trading the bounce. Just use a trail to be safe. Support sits at 36.6 at this time, while resistance lies near 38.6. For an intraday trading formation, we see a range event between these levels noted, noting that momentum and trend are bearish, but trying to reverse. Big oil traders remain skittish. Above a 38.7 retest sends us near 39.6, then 39.8 and 40.1. Below a 37.7 retest sends us to 37.14, 36.87, and perhaps 35.8 -35.9. Charts could swing wildly today in either direction – stay alert. Momentum on short time frames is mixed. See premium blog for tighter levels.
E-mini S&P Futures (ES_F)
Chart With Still Active S&P 500 Trading Levels
Upside motion is best setup on the bounce off S&P 500 futures support line near 2055, or a retest of 2064.25 after a breakout. A hold of 2064.75 should deliver 2068.25, 2071.75, then 2074.25, 2077.75. From an intraday perspective, this is a countertrend trade at this time, but this could change if the buyers show up with volume on these levels. Keep an eye out for that.
Downside motion below the failed retest of 2059 (yesterday’s support level), or at the failure to hold 2063 opens a short (watch momentum on tight time frames- that would be an aggressive short). Retracement into lower levels from 2059 gives us the targets at 2057.25, 2055.5, 2053.75, then 2050.25, 2048.5, and 2045.25.
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.
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