The S&P 500 futures are currently trading around 2459.00. The charts below both show two-hour candles, one showing the longer view going back a little over a month, and the other highlighting the market since last week.
On the longer term chart, the emphasis is on the horizontal grey region across the middle of the chart, which highlights the 2440-2445 area. This price band shows resistance at that price area going back to early June.
The next chart shows the nearer term picture with the same price area highlighted. At this point, we still recognize and respect the current higher trend. However, we also give heed to the recent pattern, which sees a new all-time high extended by 10 points or so that then trades range-bound for several sessions.
Given this, we continue to short this market using smaller size and buy dips with larger size. We enter today without any clear directional bias, but with a plan for either direction.
The upper blue trendline on each chart is drawn from Friday’s high to yesterday’s lower high. We don’t place a lot of weight on this line as resistance; however, if price breaks above this level and converts that area to support, then we look for this market to target the 2473.25 area, which is the 23.6% extension of last week’s range. That area would be a little more than 10 handles (or points) above the prior all-time high, so we think it offers a fair place to short this market or at least take profits from any bullish positions.
Next, to the downside, the green trendline currently at 2455 is drawn from last week’s low to yesterday’s low. We also don’t place an emphasis on this trendline as support; however, if it breaks and turns to resistance, then we are looking to target the grey shaded area from 2445 – 2440. If this price level is reached, we look for a strong bounce from this area.
We see the region between the trend-lines from 2455 and 2460 as a no man’s land without any clear bias.
Traders should be aware of the following on today’s calendar:
- MBA Mortgage Applications @ 7:00 AM ET
- Housing Starts @ 8:30 AM ET
- EIA Petroleum Status Report @ 10:30 AM ET.