Trading the S&P 500 This Morning
Technical Edge —
NYSE Breadth: 51% Upside Volume
Advance/Decline: 47% Advance
VIX: ~$25.75
Apologies on the late charts. Had some technical issues on me end. Cheers
S&P 500 — ES
Yesterday was a chop-day/theta burn ahead of the Fed’s rate decision on Wednesday. I wouldn’t be surprised if today is too.
On the daily chart, the ES continues to chop around at a key area, failing to break lower but stuck at the 50% retracement and key pivot from the summer.
If it can clear 3925 and more importantly, sustain above it, then bulls may jam this up to 4,000. If not, 3875 to 3880 remains in play on the downside.
A break of this zone puts the 10-day and 50-day moving averages in play near 3835.
ES — The Trade
On the left is the 30-minute chart and on the right is the H1 chart. The dashed line is last week’s high — the line in the sand.
We are seeing a nice trade back below this marking this morning, with a Globex high up around 3928.
If we continue to pullback on the open, see if the ES can find support in the 3913 to 3918 area. That’s the 10-ema range on the chart above. If not, 3900 could be on tap.
On a rally, we could have a fade-trade setup on a push up through the Globex high and a reversal back below it. At the very least, that gives us a low risk short to work with, although if breadth is strong and the bulls want to run, it could steam higher so don’t be stubborn.
Remember, the ES is already up about 1% ahead of the open.
SPY
Last week’s high is $389.52 and the SPY is set to open near $390.15.
To me, that at least has me staring at last week’s high as a potential pivot. In reality, an open above this level and a trade down through it could give us a small fade-trade to work with, with 50 to 60c in risk assuming the SPY doesn’t run too much post-open.
Otherwise, we’ll sit back and wait to see if anything else develops. We nailed yesterday, so no rush to today’s party.