The S&P 500 futures are approaching the end of the week with a very light calendar today as they roll from the September to the December contract. While all seems to point to a quiet day, we must remember that Hurricane Irma will make landfall on the mainland U.S. in the hours to come; so what seems to be a quiet market could be disturbed quickly if traders decide to remove risk going into an uncertain weekend.
For today, we are still looking at the September futures contract. The support zone highlighted in gray on the chart below is still holding; and until price converts that to resistance, we continue to look to buy between the 2459 to 2455 area today.
However, should price break below 2455, we have no intention of buying this market. Instead, we would look for lower prices with our first target at 2443.75, which was the low of this week on Tuesday.
To the upside, we expect gains to be limited, using the two trend lines on the chart as guidelines. If this morning’s 9:30 a.m. EST regular open is quiet, then we would expect resistance at the blue trendline at the 2464.00 area. If the momentum is moderately strong to the upside, then we would look for resistance at the upper green trend line at 2466.50.
Any resistance should lead to a test back to the 2459.00 area at the very least. If price does break above the trend lines, then the natural next target would be this week’s 2469.50 high. While we do not expect the market to reach that level, we should note that if it did, we believe that buy stops above 2470 would push this market up to fill the gap at 2474.00 very quickly.