The S&P 500 is forming another tight range. Will it break out or break down?
Today’s chart of the E-mini futures considers patterns that could argue either way. We’ll begin with some potentially bearish points.
First is the May 1 high, slightly above the April 18 peak. Prices failed to clear this resistance and quickly fell back into the range. That’s a potentially bearish false breakout.
Second, two lower studies could suggest the upside is fading. The Advance / Decline Line has been inching lower for almost a month. MACD has also been negative since the last week of April. (MACD could be useful because it turned lower before the drops of late December and late February.)
However, bulls might see things differently. They could view the 4068 zone as important support because it was the monthly low in April that’s holding again in May. It’s also near the spot where ES1! peaked on March 22, so old resistance might have become new support. (This level roughly matches 4050 on the cash index.)
Next, the price area reflects approximately a 38.2 percent retracement of the move between March 13 and May 1. Finding new support so high, above the 50 percent retracement line, could suggest buyers outnumber sellers.
Finally, the Nasdaq-100 has been hitting new nine-month highs. Some investors may complain about leadership being concentrated in a small set of megacap growth stocks. However, these companies led the broader market lower in late 2021. If they’re in the driver’s seat again, it could suggest further gains are coming for ES1!.
In the near-term, attention is focused the debt ceiling. Then there’s a big cluster of events June 13-14 (CPI and a Federal Reserve meeting.) It could be interesting to see how the price action plays out, given the technicals cited above and the approaching catalysts.
Trading futures just got more accessible after TradeStation slashed commissions! Click our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com/important-information.
Today’s chart of the E-mini futures considers patterns that could argue either way. We’ll begin with some potentially bearish points.
First is the May 1 high, slightly above the April 18 peak. Prices failed to clear this resistance and quickly fell back into the range. That’s a potentially bearish false breakout.
Second, two lower studies could suggest the upside is fading. The Advance / Decline Line has been inching lower for almost a month. MACD has also been negative since the last week of April. (MACD could be useful because it turned lower before the drops of late December and late February.)
However, bulls might see things differently. They could view the 4068 zone as important support because it was the monthly low in April that’s holding again in May. It’s also near the spot where ES1! peaked on March 22, so old resistance might have become new support. (This level roughly matches 4050 on the cash index.)
Next, the price area reflects approximately a 38.2 percent retracement of the move between March 13 and May 1. Finding new support so high, above the 50 percent retracement line, could suggest buyers outnumber sellers.
Finally, the Nasdaq-100 has been hitting new nine-month highs. Some investors may complain about leadership being concentrated in a small set of megacap growth stocks. However, these companies led the broader market lower in late 2021. If they’re in the driver’s seat again, it could suggest further gains are coming for ES1!.
In the near-term, attention is focused the debt ceiling. Then there’s a big cluster of events June 13-14 (CPI and a Federal Reserve meeting.) It could be interesting to see how the price action plays out, given the technicals cited above and the approaching catalysts.
Trading futures just got more accessible after TradeStation slashed commissions! Click our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com/important-information.
